Mthuli Ncube Rules Out Full Dollarisation

Finance and Economic Development Minister Mthuli Ncube says the government will not fully dollarise the economy but will maintain the current multi-currency regime.

This comes after Members of Parliament urged the government to dollarise, saying the Zimbabwe dollar had become too weak to the extent that it had made the budgetary process difficult.

Responding to legislators in the National Assembly last week, Ncube said:

We have allowed the USD [United States dollars] and ZWD [Zimdollar] to circulate and be used freely.

So, anyone can pay in USD and receive USD. I would not even use the term dollarisation, both the ZWD and USD are our currencies as of now.

There is no issue of over-use of the USD or under-use of the ZWD. We are using both those currencies and that is a policy that we said we will maintain because of the peculiarity of our situation.

You will have noticed in the last few weeks or months perhaps that the gap between the official rate and the parallel rate has narrowed.

If you believe that the parallel rate is a freely floating rate that has narrowed the gap with the official rate, surely that tells you that the official rate is as close to freely floating as possible. That is what it tells you.

Last week, the Zimbabwe dollar was trading at ZWL$950: US$1 on the parallel market from about ZWL$800: US$1 two weeks ago. | NewsDay

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