Zim will not return to old currency in near future – Mashakada
Zimbabwe Economic Planning and Investment Promotion Minister Dr Tapiwa Mashakada has confirmed that the country would not return to the use of its national currency in the near term.
“Government has a Medium Term Plan that outlines the continued use of the US dollar until 2016; however, we see the continuance of a multiple currency even beyond this,” he said, adding that there was Cabinet consensus in this regard.
The Southern African country replaced the Zimbabwe dollar with the US dollar and the South African rand as its official currencies through a ‘dollarisation’ process in early 2009.
This came as one US dollar traded above 300-trillion Zimbabwe dollars during a period of hyperinflation of 231-million per cent – a world record.
Mashakada explained that, as long as the country could not guarantee that its historical national currency could be backed by true value and production capability, it would maintain its current multicurrency economy.
This decision was further supported by an enduring lack of population confidence in the African State’s national currency following periods of acute hyperinflation in the last few years of its use, added Business Council of Zimbabwe chairperson George Guvamatanga.
“People are simply not prepared to revert, in fear of this situation repeating itself,” he commented.
Mashakada explained that the terms of trade would also promote the continued use of the current currency system as long as the value of its imports outweighed its export value.
Importantly, the use of the dollar also provided a greater degree of investment security and eliminated certain risks associated with the potentially volatile Zimbabwe dollar.
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