Economy to collapse if Z$ returns, minister

via Economy to collapse if Z$ returns, minister. 17 September 2014

ZIMBABWE’S economy risks collapsing if the country prematurely re-introduces the local currency, Finance Minister Patrick Chinamasa has said.

The country adopted a basket of multi-currencies in 2009 which mainly includes the United States dollar and the South African Rand, dumping its hyper-inflation ravaged local unit.

Chinamasa told legislators in Parliament on Wednesday the country would continue using multi-currencies as the economy was not yet ready for re-introduction of the local currency.

“We will continue using multi-currencies for a long time to come,” said Chinamasa.

“There is need to build confidence in the economy and also build our reserves, if we do not build our reserves (and re-introduce the local currency), our economy will collapse.”

The remarks followed questions by MDC legislator Nelson Chamisa on when Zimbabwe “as a sovereign state would stop using other nations’ currencies.”

In dismissing the Zimdollar talk, Chinamasa said: “We do not want to talk about things that can make our economy collapse.”

The finance minister also said Zimbabwe will introduce the special coins to address the shortage of lower denominated currency by December.

Zimbabwe, which has mostly relied on use of South African Rand coins, has faced small change challenges since the introduction of multi-currencies.

Consumers have in some cases been given sweets, pens, matches among other small items in lieu of change.

“We are hoping that by December we will have addressed the small change problem,” Chinamasa said.

Introduction of the special coins was initially announced by the Reserve Bank of Zimbabwe in its recent monetary policy statement last month.

Chinamasa said the coins, whose value would be equivalent to the United States dollar, would be backed by a $50 million facility.

COMMENTS

WORDPRESS: 9
  • comment-avatar

    Economy R-I-S-K-S collapsing? Where have you been for the past 12 months?

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    tapiwa 8 years ago

    Ok I don’t know if there is someone out there who can actually explain how these ‘special coins will work’. So I go to the bank and I get myself say $2000 worth of these coins and do not recirculate them but put them under my bed will that not have any effect on the money in circulation and subsequently will that not mean that the $50million is now worth less than that. Except if ‘each of these special coins’ is worth something like in the ‘old days’ where you could buy a sweet with them and thus kids would pick them up and run kumagurosa for a sweet they might really have little effect sooner than later. But again it might just be me not understanding economics of money flow.

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    Shenanigans 8 years ago

    Try BITCOINS.

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    Nyati 8 years ago

    A clever way of printing money.
    zim is broke. If they bring back
    $Z, all of us will run away fo our lives. Do Shumba vakaudzwa kuti, do it in small bits . These guys are printing money.

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    Layman 8 years ago

    I can’t understand how all of you don’t realize that these coins are a Trojan Horse.. This is clearly the first steps of reintroduction of a local currency. I gave that scenario at a drinking party to my friends more than two years ago and they called after the announcement to remind me of my prediction. This was after I noticed people would accept pieces of paper, cards etc as change on minibuses and thought if RBZ introduces coins then people will accept. THE ZIM CURRENCY IS BACK IN DECEMBER.

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    MlimoPhd 8 years ago

    I heard china massa was going for his Phd too soon he will be solving all the countries problems . But in the interim he’s not printing more money just making more coins. That way zanupf can steal 50 million legally. Him and Gucci lips phd and Mujuru phd will make quite a trio. I also heard his excellency Robert is also getting a phd to add to his list. And so is Gono. I am in good company with my newly acquired lucky packet phd.

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    nyoni 8 years ago

    WE ALL KNOW THAT YOU CLOWN. Even my senile dog thinks better than that. Instead of making obvious and stupid statements try and fix the problem you created in the first place . Please God sack these completely useless things . What kind of morons did we have to get.

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    Mena Bona 8 years ago

    Better to store the sweeties that are handed out as change under your bed. In no time they will be worth more than any kind of currency that ZANU PF run country may print.