Biti says change is coming

The forced buying of items and goods like $1 for 10 bananas when one only wanted one or two or $1 for 20 mice, as per joke that was going around recently, could now be a thing of the past as the government is planning to bring in US dollar coins.

Finance Minister Tendai Biti today said he had  had fruitful interactions with the United States Department of the Treasury which was ready to facilitate access to coins and to replace soiled notes.

Some people had taken to washing one dollar notes to keep them clean.

The minister said this when he unveiled his $2.7 billion budget for 2011 which he said would be entirely funded from domestic resources.  He also said the economy would grow by about 9.3 percent up from this year expected 8.1 percent growth. Last year, the economy grew by 5.7 percent.

Biti said the lack of US coins and the use of cross rates with people paying in US dollars but getting change in South African rand had seen consumers being forced to buy unbudgeted items with sellers of goods and services rounding up prices.

Though this problem had been alleviated by the use of electronic payment systems, the minister said, this was of no benefit to the large informal sector and the rural population because they had no access to the systems.

“In the Mid-Term Fiscal Policy Review I made an undertaking that government was going to underwrite, in partnerships with banks, improved accessibility to smaller denominations and coins. I am, therefore, pleased to advise on the fruitful interactions with the US Department of the Treasury which stands ready to facilitate access to acquisition of smaller denominated coins and replacement of soiled notes through the US Federal Reserve and commercial banks,” Biti said.

“I will, therefore, be finalising on this in conjunction with the banking system, that way resolving the matter of challenges with change and coins. The public will be kept informed of developments in this respect.”

He said the availability of both US dollar and rand coins will  do away with the challenges posed by the current need to apply cross rates in giving change in rand coins for transactions undertaken in US dollars, a system that was being abused because some businesses were changing the rand to the US at R10 to $1 when the real rate is R7 to $1.

This had also resuscitated the black market in some areas.

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