Business / Economy
Zimbabwe urged to mint US coins
29 Jun 2012 at 02:19hrs | Views
Due to the high cost of importing coins the Bankers Association of Zimbabwe (Baz) has urged the Reserve Bank to mint coins, according to the Zimbabwe Independent.
They hope this move will alleviate the problem of unavailability of change in small denominations in the economy to facilitate smooth transactions.
According to the proposal, the coins could be exchanged on a dollar-for-dollar basis enabling people to redeem coins for notes should they accumulate large amounts of coins.
"This in our view will bring a lot of convenience to the public and make pricing simpler," Baz president George Guvamatanga says in a letter, dated May 14 2012, to Reserve Bank governor Gideon Gono.
"This will reduce the unnecessary price increases that have been attributed to the absence of coins."
The bankers suggested a directive be issued encouraging operators to provide change to the public.
Their letter also says the cost of importing coins has been an inhibiting factor in efforts made so far in making coins available.
Following adoption of multi-currency use, bankers imported several million rand worth of coins from South Africa but these were re-exported after bankers failed to agree on an uptake rate with retailers.
In the 2011 budget statement, Finance minister Tendai Biti said government had engaged the United States Federal Reserve over possible provision of coins and replacement of soiled notes to ease small change problems in the country.
Biti said he was working with the banking sector to import US coins to resolve the problem posed by the current challenge of applying cross rates in giving change in rand coins for transactions made in US dollars.
However, Baz has now shelved plans citing the huge costs of importing the coins. It said importing US$5 million worth of coins in various denominations required another US$5 million to pay for them.
They hope this move will alleviate the problem of unavailability of change in small denominations in the economy to facilitate smooth transactions.
According to the proposal, the coins could be exchanged on a dollar-for-dollar basis enabling people to redeem coins for notes should they accumulate large amounts of coins.
"This in our view will bring a lot of convenience to the public and make pricing simpler," Baz president George Guvamatanga says in a letter, dated May 14 2012, to Reserve Bank governor Gideon Gono.
"This will reduce the unnecessary price increases that have been attributed to the absence of coins."
The bankers suggested a directive be issued encouraging operators to provide change to the public.
Following adoption of multi-currency use, bankers imported several million rand worth of coins from South Africa but these were re-exported after bankers failed to agree on an uptake rate with retailers.
In the 2011 budget statement, Finance minister Tendai Biti said government had engaged the United States Federal Reserve over possible provision of coins and replacement of soiled notes to ease small change problems in the country.
Biti said he was working with the banking sector to import US coins to resolve the problem posed by the current challenge of applying cross rates in giving change in rand coins for transactions made in US dollars.
However, Baz has now shelved plans citing the huge costs of importing the coins. It said importing US$5 million worth of coins in various denominations required another US$5 million to pay for them.
Source - The Zimbabwe Independent
