Zimbabwe Finance Minister Mthuli Ncube yesterday told Parliament that the country was not going back to using the United States dollar as the sole currency because it was a very bad idea.
Responding to a question on what the country was doing to curb the black market, Ncube said the government and the central bank had adopted several measures to curb the black market and to promote the use of the local currency.
“I want to be clear, we are not US dollarising. We will not US dollarise. US dollarisation is a very bad idea,” he said.
“The reason why our industry is performing well, the utilisation is up there……is because we have a domestic currency. It has made our economy to be competitive; we cannot use the US dollar as a sole currency. That will be a very bad idea indeed.”
Several economists have said that Zimbabwe will be forced to dollarise because of its declining local currency. One said it would dollarise by June while another said elections will force the country to dollarise.
The Zimbabwe dollar is currently pegged at $124.02 to the United States dollar. The black market rate is almost twice that.
Citizens Coalition for Change vice-president, Tendai Biti, who was Finance minister from 2009 to 2013 had predicted that the local currency will fall to $1 000 to one by the end of the year.
Q &A:
HON. CHIKWAMA: Thank you Madam Speaker. My question is directed to the Minister of Finance and Economic Development. Do you have any mechanism or plan which reduces black market exchange rate? Most shops in rural areas are using the black market rate on their pricing. As a result, the prices are very high and cannot be afforded by the rural people. Thank you.
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