Business / Economy
Zimbabwe rules out Rand single currency usage
24 Jun 2016 at 06:59hrs | Views
Finance and Economic Development Minister Patrick Chinamasa yesterday ruled out the use of South African rand as the sole official trading unit saying the Government did not intend to adopt a single currency, but would maintain the multi-currency system.
Minister Chinamasa said the rand was already on the multi-currency basket, hence had to be used like any other units.
He was presenting a Ministerial statement on the state of the economy and pending introduction of the bond notes.
"Further there have been calls for the adoption of South African rand as the transacting currency by many people. The rand remains part and parcel of the multicurrency system and economic players are free to switch to any currency as a way of managing their operations. We do not intend to adopt a single currency, but we will continue to bolster the strength of the multi-currency system," said Minister Chinamasa.
He said bond notes would not be imposed on anyone who did not intend to use them.
Minister Chinamasa was responding to fears that the introduction of bond notes would signal the return of the Zimbabwe dollar.
"It is also important to note that bond notes will not be forced to people who don't like them especially if you are not an exporter. It does not mark the return of the Zimbabwe dollar because key fundamentals are not yet present," he said.
Minister Chinamasa said the release of bond notes in the economy would be consistent with export receipts.
"The issuance of bond notes has a self-control mechanism in that where there are no exports there are no bond notes. In other words the bond notes are issued relative to the volume of exports. The bond notes will be gradually released into the economy in sympathy with export receipts through a normal banking channel up a maximum ceiling of the facility of $200 million. The ceiling will be attained when total exports are around $6 billion. Currently our exports are $3 billion something that I worry about because we are very low when compared to other countries," said Minister Chinamasa.
He said while the Reserve Bank of Zimbabwe was monitoring depositing trends of some businesses as a way of ensuring that they deposited all their monies in financial institutions, the initial objective was not to close businesses.
He said businesses that did not deposit their money would be made aware of that legal requirement in a "market friendly way," and the law would only be invoked if that did not produce desired results.
"We do not intend to close any shop. We will explain to them. Only if they do not comply will we descend heavily on them," said Minister Chinamasa.
He said more than 17,400 point of sales had already been set up in various businesses as way of encouraging use of plastic money.
Minister Chinamasa said the rand was already on the multi-currency basket, hence had to be used like any other units.
He was presenting a Ministerial statement on the state of the economy and pending introduction of the bond notes.
"Further there have been calls for the adoption of South African rand as the transacting currency by many people. The rand remains part and parcel of the multicurrency system and economic players are free to switch to any currency as a way of managing their operations. We do not intend to adopt a single currency, but we will continue to bolster the strength of the multi-currency system," said Minister Chinamasa.
He said bond notes would not be imposed on anyone who did not intend to use them.
Minister Chinamasa was responding to fears that the introduction of bond notes would signal the return of the Zimbabwe dollar.
Minister Chinamasa said the release of bond notes in the economy would be consistent with export receipts.
"The issuance of bond notes has a self-control mechanism in that where there are no exports there are no bond notes. In other words the bond notes are issued relative to the volume of exports. The bond notes will be gradually released into the economy in sympathy with export receipts through a normal banking channel up a maximum ceiling of the facility of $200 million. The ceiling will be attained when total exports are around $6 billion. Currently our exports are $3 billion something that I worry about because we are very low when compared to other countries," said Minister Chinamasa.
He said while the Reserve Bank of Zimbabwe was monitoring depositing trends of some businesses as a way of ensuring that they deposited all their monies in financial institutions, the initial objective was not to close businesses.
He said businesses that did not deposit their money would be made aware of that legal requirement in a "market friendly way," and the law would only be invoked if that did not produce desired results.
"We do not intend to close any shop. We will explain to them. Only if they do not comply will we descend heavily on them," said Minister Chinamasa.
He said more than 17,400 point of sales had already been set up in various businesses as way of encouraging use of plastic money.
Source - chronicle
