Reserve Bank of Zimbabwe to compensate for Zimdollar losses by June 30

The central bank will demonetise the Zimbabwe dollar currency by June 30 this year to compensate depositors who lost their savings and pensions when it adopted foreign currencies in 2009 to replace the collapsed local unit.

“The significance of this policy measure is to bring to finality to this long outstanding government obligation to the banking public and to formally pronounce the demise of the local currency,” central bank governor John Mangudya said in the monetary policy statement today, adding that the central bank had set aside $20 million for the purpose.

“All genuine or normal bank accounts, other than loan accounts, as at 31 December 2008 would be paid an equal flat amount of US$5 per account. The then prevailing United Nations (UN) exchange rate would be used to convert Z$ balances that were as a result of arbitrage opportunities “burning” and for Z$ cash to be received from the walk-in banking public,” said Mangudya.

Demonetising the Zimbabwe dollar would help preserve the multiple currency system, which he said Government would maintain until economic fundamentals have reached acceptable and sustainable levels.

“The reality of the national economy is that all the…economic fundamentals or indicators are weak to even contemplate the return of the local currency,” said Mangudya.

The RBZ would soon publicise the modalities of the demonetisation process, he added.

He said the central bank is satisfied with the uptake of the bond coins, whose effect has seen prices being reduced on several goods and services, but noted that some parts of the country were not getting the coins.

RBZ subsidiary, Easy Link Money Transfer Agent outlets will now make the coins available to the public without charging commission or withdrawal fees.

The Bank is also planning to launch a campaign to promote the use of bond coins.- The Source

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