Return of the #Zimbabwe dollar?

via Return of the Zim dollar? | Africa | Africa | Mail & Guardian 11 APR 2014 by Kennedy Maposa

Facing serious funding problems, the Zimbabwean government may switch on the money presses again.

The Zimbabwean government is seriously contemplating bringing back the country’s troubled Zimbabwe dollar, impeccable sources in the banking sector and the government have told the Mail & Guardian.

The move is being considered to rescue the embattled government from a funding crisis precipitated by a liquidity crunch that now threatens to undermine government operations. But it could spin the economy out of control and trigger a crisis.

Zimbabwe abandoned its currency in 2009 after it reached unmanageable levels of inflation.

The M&G this week spoke to a banker and two top civil servants, who confirmed the plans to reintroduce the currency. They said the government, which has been unable to pay civil servants’ salary increments, overdue by four months, is seriously underfunded and it is considering bringing back the Zimbabwe dollar as “an easier way out”.

Some Zim dollar notes were printed in October and November 2013, a senior official at Fidelity Printers and Refineries said. They were all high-denomination notes, with the biggest being $10-million.

Discussions
“Everyone involved in the printing was asked to sign confidentiality assurances, but I can tell you we had some notes printed in November. The Zimbabwe dollar is coming back,” the source said.

Another source working for the government said the issue has been discussed by some of President Robert Mugabe’s lieutenants. The source could not say whether they included Finance Minister Patrick Chinamasa.

“At the moment, I don’t think it has come to a point where it can be publicly discussed, even within the ruling party’s politburo. It’s a sensitive issue,” the source said.

A central bank official declined to deny or confirm the plans, asking only: “Would it be a bad idea bringing it back?”

Financial situation
Another government source said the government’s financial situation has become so dire that it now finds itself in arrears with the compulsory pension fund, the National Social Security Authority and the public service pensions and health insurer PSMAS, which it owes more than $6-million for 2013 alone.

“The government has been deducting NSSA and pension contributions for civil servants, but has not been remitting them. There are arrears for the agreed salary levels, which have been promised for the end of April, but current revenue levels will not sustain these,” the government source said. He said Mugabe’s government had initially hoped to raise money from the alluvial diamonds being mined in Chiadzwa, but these appear to have been depleted.

The mining of conglomerate diamonds will require a major investment, which the government and its mining partners in Chiadzwa do not have, he said.

“The Zim dollar will, therefore, be a quick solution but the tragedy is that it’s a seriously short-term plan. But who has a clue about raising cash to get the economy working? It’s getting desperate,” he said.

‘Multicurrency regime’
Chinamasa’s cellphone was not answered when comment was sought. But in the past, he has repeatedly said that the Zimbabwe government is not considering bringing back the Zimbabwe dollar. He told captains of industry in December that the question had begun to annoy him.

“The multicurrency system will remain for the next five years. I do not want to continue being asked that question. It is going to be a multi­currency regime,” he said.

The acting governor of the reserve bank, Charity Dhliwayo, also ruled out the return of the Zimbabwe dollar. In her monetary policy statement issued in December, she increased the number of currencies that can be used as legal tender, bringing the total to seven. Zimbabwe uses the United States dollar, the South African rand, the Botswana pula, the Japanese yen, the Chinese yuan, the British pound and the Australian dollar.

Mugabe himself has not closed the door on the possibility of bringing it back. Speaking during campaigning last July, he said that he had been working privately with former reserve bank governor Gideon Gono to bring it back, backed by gold reserves.

 

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24 comments on “Return of the #Zimbabwe dollar?
  1. solo says:

    BRINGING BACK THE ZIM DOLLAR SPELLS THE END OF THE ROAD FOR THE GOVERNMENT.

  2. Senzachena says:

    They have no other choice! Thats if they want to pay the Security Forces and Civil servants. It wont help them it will just hasten the total collapse of the country. The other option is of course to get all parties together and form a Government which has some legitimacy, then watch the foriegn funding and investment pour in. They wont do that because they wont be able to steal as much as previously. It wont be long now!!! ZANU Trash

    • Jono Austin says:

      Definitely they have no choice. They’ll probably introduce it at ZWD10:USD1. Then of course they will print it like there is no tomorrow. That will of course result in massive devaluation which they will blame on sanctions. They will force shops to accept ZWD and when the shops put up their ZWD prices they will accuse shopkeepers of ‘profiteering’ or causing inflation. Police will be sent in to ensure prices are not put up-ie they will buy everything in sight to sell around the corner at huge ZWD profit. Shop shelves will be empty. And the circus repeats and continues…

    • What is most likely to happen is that they peg it at a certain amount and then they print and buy all the FOREX they can at the pegged price whilst on the street it is at a different rate. KEEP YOUR US DOLLARS UNDER THE MATTRESS, THIS WILL BE COLLAPSE PART TWO.

    • munzwa says:

      Get all parties together to give some legitimacy to the Govt and have FDI pour in!!!!!????? are you out of your mind, what legitimacy can the MDC bring to the table at the moment!!! Just brace yourself for the return of the Zim $

      • Parangeta says:

        You’re an idiot! Anything without ZANU-PF would be
        considered a success by the West, and yes, FOREX
        would pour in.

        Anyway, how can they, M’Garbage and Gonad back the
        Zim dollar with gold, there isn’t any!

        Brace for the Zim dollar you say, you idiot!

  3. John Thomas says:

    Any attempt to introduce a Zimdollar or zanudollar will be stillborn. All stock will disappear and goods will only be available for real dollars. Taxes will be paid in the rubbish money. Civil servants will be paid with money that cannot buy anything.

    Bring it on you ZANU pigs. This will be your biggest defeat yet.

  4. Tjingababili says:

    AND THE PRINTING PRESSS! AND DR ZEROOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!

  5. Chaka says:

    Our gvt will not stop doing the wrong things. Sympathy to civil servants, the first to receive zero money. We all know, as much as the gvt knows, that one can keep adding zeroes to a figure tirelessly, the figure will remain zero.

  6. Insider says:

    There is no doubt that all the comments above are relevent and will happen. However, you will go to bed with US$ and wake up with Zim$, in your bank account. The talk is that it will be one for one, where do you think all the stolen US$ will go. Easy to answer “Off Shore”. I have been warning all of you for some time, now is the time to act GET YOUR US$ OUT OF THE BANKS, otherwise you will lose hands down. Dont cry when it happens if you dont act now.

  7. fkr says:

    Yes the only way is to keep your hard currency out of the banks and save as much as you can. Don’t buy anything that you don’t need as it’s the only real money you will have soon. Sorry for you guys. Zim could be such a great country and will be one day maybe not in our life time but maybe your children’s.

  8. NBS says:

    ZPF are trying to dig their way out of hell! No repentance! No restoration!

  9. Mixed Race says:

    This is a smart move towards satisfying the naive civil servants,let them get trillions and trillions of dollars in wheelbarrows for their pay days. This will make them very rich with fat useless accounts in the banks.You get what you sow in life and they won’t be able to maintain all these vehicles they bought a year ago as an advance incentive for voting the way they did.Be prepared to see more of these hired Mapositolis with fake US$ around the street corners hired by the politicians.Its time you start saving your USA $ for cross borders grocery trips because there will be nothing in the shops again.
    Join me to develop your green gardens because we are likely to revert to the 2005-2008 era with nothing in the shops.We are lucky because F/town is only an hour and a half from us.

  10. Ping Pong says:

    Oh so do we start burning dollars again for QUADRILLION. MINE is still in da bank yepee for nothing. Lost at sea!

  11. bingo wajakata says:

    I have said it and I will say it again! If you bank your cash in ZW do not cry once the Zim dollar is back and sure as the sun rises in the east the Zim dollar is coming back before the end of the year.

  12. bingo wajakata says:

    The Z$ is coming back before December this year. If you bank your money do not cry.

  13. munzwa says:

    so what will happen to all the Zim $accounts that are still registered?

  14. DubboZimbo says:

    Back to shopping with a wheelbarrow……..not for the few grocreries but to transport piles of worthless paper. Mugabes your incompetence never ceases to amaize us.

  15. The sailors who were going to Tashish could not have done so if Jonah had remained in the ship . He was the source of the prblm , he had to get out of the ship for the journey to continue . Our ship is going to sink bcz of Jonah . Take him out u damn …. How l hate cowards .

  16. Parangeta says:

    I LOVE the idea of bringing back the Zimbabwe Dollar.

    That rumor alone, will mean no one deposits their
    US$, AU$, Yuan, Yen or whatever in the Banks.

    * Bank crash!

    Then, what is in the Banks will be withdrawn asap,

    * Bank rush!

    Lastly, the Defense Forces, Police, Security Branches will
    get paid with Zimbabwe dollars, and rebel!

    * Military Coup D’etat!

    * Military Regime change!
    * Civil War!
    * Cry for help!
    * UN Peace Keepers!
    * US, UK, French, Australian Forces!
    * New Elections!

    *** MTC’s Tsvangarai is President……woo! hoo!

  17. Mlimo says:

    I need some pretty toilet paper preferably with robber or graces face on it.

  18. Petal says:

    Millions, Trillion, ZILLIONS! KEEP IT UP WELL DONE!!

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