Zimbabwe warns firms on multi-currency system

via Zim warns firms on multi-currency system – DailyNews Live 24 APRIL 2014

Zimbabwe has urged firms to capitalise on the multi-currency system by boosting exports, warning that the scheme will eventually be abolished.

Mines minister Walter Chidakwa said the system – dominated by the United States dollar – will not stay forever and “there is need to make alternative plans”.

In 2009, Zimbabwe abandoned its currency, ravaged by galloping inflation topping 231 million percent, to adopt various currencies including the South African Rand, Botswana Pula and Euro among others.

“No one knows for sure when the multi-currency system will be scrapped, but the few Zimbabwean companies still manufacturing need to start increasing their export volumes,” Chidakwa told a Special Economic Zones workshop recently.

“Increasing export levels will provide a cushion when the multi-currency system is abolished. A rainy day is definitely coming and,” said Chidhakwa.

Recently, the Reserve Bank of Zimbabwe (RBZ) widened the multi-currency basket to include four more foreign currencies.

Currencies of China, India, Japan and Australia were added.

Meanwhile, Finance minister Patrick Chinamasa last year said Zimbabwe will continue using the multi-currency system for the next five years.

According to Zimbabwe Statistics agency, the country’s trade deficit 2013 widened to $3,89 billion in the year to November 2013.

During the period imports stood at $7,15 billion dominated by fuel, fertilizers, second-hand car imports and textiles.

Exports, mainly minerals and tobacco, were $3,25 billion.