Govt to compensate Zimdollar losses

via Bulawayo24 NEWS | Govt to compensate Zimdollar losses 22 July 2014

Treasury is considering a token repayment for the Zimbabwe dollar accounts lost in the changeover to the multi-currency regime in 2009, and this to restore confidence in the financial services sector, parliament was told on Monday.

Providing oral evidence to a parliamentary portfolio committee on Finance and Economic Development chaired by David Chapfika, Finance and Economic Development minister, Patrick Chinamasa, said there was need to demonetise the Zimbabwe dollar accounts in order to restore confidence in the banking sector and shore up deposits.

“Members of the committee will remember that in my budget I spoke about demonetisation where I sought ideas as to how we can demonetise the Zimbabwe dollar, and I am yet to receive a paper telling me on how to go about it,” Chinamasa said.

“But I just want to emphasise that it is very important that we do take that route. What form it will take, I cannot tell. But it will help to restore public confidence in the financial services sector, even if it’s a token commitment to address the problem.”

The majority of the banking public lost fortunes in 2009, at the time of migration to the multi-currency regime after years of record inflation.

He said that the treasury and the central bank were still inviting ideas as to how to demonetise the Zim dollar.

“I would not want to mislead the public at this current time. But we would want to inform the public that we are doing something with regards to demonetisation. However, we will announce at the appropriate time when we have reached a decision as to the way that we would have adopted.”

Chinamasa said that the financial service sector remained healthy and sound as deposits continued to grow, reaching $4,7 billion in May. He bemoaned the continued existence of sanctions, which he said were limiting credit lines to attract fresh capital.