Business / Economy
'Zimbabwe's multi-currency system to stay,' says Chinamasa
19 Dec 2013 at 11:12hrs | Views
Zimbabwe's Finance and Economic Development Patrick Chinamasa has moved to put to bed talk of the return of the Zimbabwe dollar.
In his budget speech he said that there was a commitment to the continued use of the multi-currency system as the economy tries to rebound from a slow 2013.
"We might in fact add more currencies which are not in the current basket," said Chinamasa.
"Continued use of the multi-currencies is important to the growth of the economy in 2014."
"Zimbabwe dollar will be demonitised."
He made this statement in his budget speech on Thursday.
Former Finance minister Tendai Biti said on Tuesday the Zanu-PF government would be forced to reintroduce the shelved Zimbabwe dollar next year to avert total economic collapse.
"The sad truth of the matter is that the Zimbabwean dollar will be back. It is not a matter of if, but when," the MDC shadow Finance minister told a press briefing at the party's Harvest House headquarters in central Harare.
Zimbabwe abandoned its local currency in 2009 after it had been ravaged by hyperinflation which topped 231 million and introduced a basket of foreign currencies dominated by the United States dollar.
However, speculation has been rife following the re-election of President Robert Mugabe in August this year that the local unit will be re-introduced. Some officials in Mugabe's Zanu PF party have called for the reintroduction of the Zimbabwean dollar to help ease liquidity challenges in the economy.
Chinamasa had earlier said the regime will continue indefinitely but Tony Hawkins, the head of the University of Zimbabwe's Graduate School of Management said the tightening liquidity in the economy could force a rethink and that there was always the risk that politicians would seek a "superficially attractive" way out to finance campaign promises.
Biti noted it would be difficult to revert back to the local currency under the current economic environment but said government will railroad its return nonetheless.
"It's impossible to go back to your own currency once you have dollarised," he said.
"This is because currencies strive on trust and confidence and the Zimbabwean populace have no trust in the Zimbabwean dollar.
In his budget speech he said that there was a commitment to the continued use of the multi-currency system as the economy tries to rebound from a slow 2013.
"We might in fact add more currencies which are not in the current basket," said Chinamasa.
"Continued use of the multi-currencies is important to the growth of the economy in 2014."
"Zimbabwe dollar will be demonitised."
He made this statement in his budget speech on Thursday.
Former Finance minister Tendai Biti said on Tuesday the Zanu-PF government would be forced to reintroduce the shelved Zimbabwe dollar next year to avert total economic collapse.
Zimbabwe abandoned its local currency in 2009 after it had been ravaged by hyperinflation which topped 231 million and introduced a basket of foreign currencies dominated by the United States dollar.
However, speculation has been rife following the re-election of President Robert Mugabe in August this year that the local unit will be re-introduced. Some officials in Mugabe's Zanu PF party have called for the reintroduction of the Zimbabwean dollar to help ease liquidity challenges in the economy.
Chinamasa had earlier said the regime will continue indefinitely but Tony Hawkins, the head of the University of Zimbabwe's Graduate School of Management said the tightening liquidity in the economy could force a rethink and that there was always the risk that politicians would seek a "superficially attractive" way out to finance campaign promises.
Biti noted it would be difficult to revert back to the local currency under the current economic environment but said government will railroad its return nonetheless.
"It's impossible to go back to your own currency once you have dollarised," he said.
"This is because currencies strive on trust and confidence and the Zimbabwean populace have no trust in the Zimbabwean dollar.
Source - online
