Zimbabwe’s Central Bank Rules out the US Dollar


Zimbabwe’s central bank rules out return to US dollar

Ray Ndlovu

Zimbabwe’s central bank has ruled out a return to using the US dollar as official currency because there’s not enough greenbacks in the country.

The financial system is still dominated by the local unit, Governor John Mangudya said in a monetary policy statement released Monday. The Zimbabwean dollar, reintroduced three years ago, accounts for 56% of bank deposits with the balance made up of foreign currency, “which shows that there is no sufficient foreign currency liquidity to support dollarisation in Zimbabwe,” he said.

The current system in which both the Zimbabwean dollar and foreign currencies are used for payments is ideal for promoting growth and competitiveness of the economy, Mangudya said. 

The governor’s comments come as the government has sought to encourage the use of the local unit that’s plunged by 22% against the US currency since October. That’s helped fuel inflation to more than 60% in January.https://60d65a2d322b9367155b6c59d648834c.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

The US dollar is being used to pay for everything from fuel, food, medicines and school fees. State workers and bank employees have requested to be paid in greenbacks. 

The local currency must be embraced to minimise the “sentimental value” of holding onto the past dollarisation era which had its own challenges, including making the economy uncompetitive and difficult to service foreign obligations, Mangudya said. 

The southern African country shifted to the US dollar from 2009 to 2019, after the local currency collapsed and a bout of hyperinflation decimated savings and resulted in fuel and food shortages. 

Dollarisation is “not a panacea to sustainably and competitively develop the country,” he said.

Source: News24


If you wish to contact the author of any reader submitted guest post, you can give us an email at UniversalOm432Hz@gmail.com and we’ll forward your request to the author.

All articles, videos, and images posted on Dinar Chronicles were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes.

Dinar Chronicles is not a registered investment adviser, broker dealer, banker or currency dealer and as such, no information on the website should be construed as investment advice. We do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content or communications posted on this site. Information posted on this site may or may not be fictitious. We do not intend to and are not providing financial, legal, tax, political or any other advice to readers of this website.

Copyright © 2021 Dinar Chronicles


Please enter your comment!
Please enter your name here