Speaking during the Daily News Business Breakfast Forum, “Implications Of The New Currency” on Monday morning, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya outlined the implications of the introduction of local currency. He said:
- Stability on the interbank foreign exchange market as more foreign currency is sold through formal channels. As at end of June 2019 US$664 million had been traded.
- Reduction of trading of foreign currency on the parallel market.
- Stronger demand for local currency, which strengthens its value.
- Halting of costly re-dollarisation – economic agents were reverting to use of US dollar as the unit of account and medium of exchange;
- Improved monetary policy effectiveness – use of monetary policy in instruments to control inflation and maintain price stability going forward;
- Retention of foreign exchange accounts (current Nostro deposit position around US$1 billion or around $3 months import cover) to boost economic activity in the country;
- Restoration of confidence in the economy as measures yield positive results;
- Creation of certainty which assists business in planning and decision making
- Creation of scope for increased production and productivity – low production is the major challenge facing the economy.
You are so wrong Mr. Panonetsa on the “restoration of confidence”. Its unfortunate you guys are divorced from the reality on the ground. The local currency prices being charged I the shops now are so high and pegged against the USD. Things have actually gone worse. Take a walk and see.
People are suffering guys
Zimbabwe is too small to continue using the USD. The biggest mistake was adopting the USD in the first place. Getting rid of this currency was the best thing which ever happened to Zimbabwe. I hope Zimbabweans will soon understand what a USD can do to any economy. They should ask other African countries… Why they don’t use the USD…..