Indeed in some months, we will have our own currency according to the Finance Minister. That means this fake-almost-money bond note will be booted out of circulation and we will start to use our very own Zim Dollar. You may not know it but according to the Finance Minister, the wheels of having the Zim dollar back were already set in motion in October when he ordered the separation of Nostro balances and RTGS balances. Speaking yesterday, The Finance Minister said:
On the issue of raising enough foreign currency to introduce the new currency, we are on our way already, give us months, not years. There is a balance between preservation of value and removing price distortions. The separation of accounts between the FCA and RTGS accounts was the beginning of currency reform……..Our job is to introduce a currency that will be stable and less volatile. Dealing with the fiscal side is the first order to move towards a stable currency, after all what we have now is fiscal policy and now monetary policy and we have to tighten the belt on the currency volatility.
Bringing back the Zim dollar is the perfect option as the government will ‘kill’ the currency black markets that have significantly contributed to the growth of inflation. But bringing back the Zim dollar raises several questions such as: do we have enough gold or foreign currency reserves to support the Zim dollar?
The issue of the fate of the RTGS balances will have to be solved also. Right now there is 9 billion worth of RTGS balances in circulation which RBZ doesn’t know where they came from. To avoid the erosion of people’s saving, these RTGS balances will have to be converted to the new Zim Dollar but without causing monetary inflation. Now another question pops up: who is willing to give Zimbabwe, a bad debtor, 9 billion so that it converts its RTGS balances into credible Zim Dollars?
I have just realized that The Finance Minister doesn’t pretend to be ignorant to some suggestions to adopt the South African rand as our currency. But as how Professor Mthuli Ncube put it, we first need foreign currency to get acquire the rand and make it our currency.
I also hear that the citizens are pushing towards adopting the rand, I even argued for it years ago and there was a reason, you know, if we are going to assume the rand as our currency we first of all have to acquire the rand and we need US dollars first to purchase the rand, in the long term Zimbabwe needs its own currency.