Yesterday’s budget presentation confirmed that the government is still okay with the multicurrency system. This is despite the fact that, there has been a rise in the illegal trading of currencies (US Dollars and Bond notes and RTGS balances) which has, in a way, lately fueled the rise of cost of living in the country. Presenting the budget, the Finance Minister said;
… the multi-currency system remains in place, with the US dollar being the currency of reference, out of the currency bask. Government is mindful of the need for preservation of value, hence, the taken to decisively implement measures, focusing on addressing the budget deficit, money supply growth, current account deficit, and inflationary pressures. It is important to note that, apart from prudent fiscal and monetary policy measures, disciplined market conduct by all economic agents is also key in the preservation of value.
While it was expected for the multicurrency system to remain in place, it wasn’t expected that the issue about the exchange rate of the US Dollar to bond notes (and electronic money balances) would be completely ignored. The exchange rate of these currencies has been a bone of contention by many stakeholders with the government maintaining that all the two currencies are at par (1:1) whilst other stakeholders saying that they are not equal. Not addressing the issue now and also upholding the multi-currency system means that we have to make do with the rising cost of living.