We Can’t Adopt The US Dollar As The Sole Official currency – Ncube

The Minister of Finance and Economic Development, Professor Mthuli Ncube, has said Zimbabwe will not adopt the United States dollar as the country’s sole currency.

He said the government will work to progressively defend the value of the local currency.

This came out on the first day of the three-day 2022 Parliamentary pre-budget seminar which opened in Victoria Falls Saturday.

His remarks come amid calls by some Members of Parliament, particularly opposition legislators, for a return to the US dollar. Ncube said:

Colleagues we cannot adopt the United States dollar alone as the official currency. You were there before and there were queues at banks, huge foreign currency deficits and you had deflation. That was because of the US dollar. It is not a good idea, and it will be suicidal to do so.

What has happened is after we introduced the local currency, industry is picking, it’s about stabilising the currency. We are reforming the country, running the country under a basically dual currency regime (Zimbabwe dollar and US dollar) and of course other smaller currencies.

We are using both currencies and you will see shifts one way or the other. We are trying to stabilise the Zimbabwean dollar and we have done well to ensure salaries are not eroded. The United States dollar is performing the role of a savings and investment currency while the Zimbabwean dollar is performing more the role of a transactional currency than an investment currency.

This comes as the local currency is losing value against the United States dollar prompting businesses to prefer the foreign currency which they say stores value.

In his presentation, Reserve Bank of Zimbabwe (RBZ) governor, Dr Mangudya said to reduce the widening gap between the parallel market and the auction rate, the RBZ will ensure “allotments of foreign currency to all bona fide transactions through the auction system including to individuals”.

More: The Sunday Mail