HON. SEN. ENG. MUDZURI: On a point of order, Mr. President. I asked a question which he has not answered in his statement. I said I wanted to ask a follow up question and then he said he was going to give a statement and that question has not been answered in that statement.
THE HON. DEPUTY PRESIDENT OF THE SENATE: Alright, you can ask the question again.
HON. SEN. ENG. MUDZURI: It is here, I can repeat it because if you answer this, I will be able to discuss what you have said. Before I seek clarification, I wanted the Minister to tell me what currency he is budgeting on, what currency we are using in the country because when he was giving his statement, he is also saying people might be asked to pay for their taxes in United States dollars.
THE HON. DEPUTY PRESIDENT OF THE SENATE: Just ask your question.
HON. SEN. ENG. MUDZURI: My question is simply that when he tells me what currency we are using now, then I will clarify on his statement.
HON. PROF. M. NCUBE: Thank you Hon. Mudzuri for that question. We have a multi currency regime. We have pronounced that this is here to stay. That is the currency regime we are using now and the reference accounting currency in terms of our budget is in United States dollars and we have guaranteed a 1:1 conversion in terms of United States dollars and other forms of payment. We announced that. The reason why we are doing that is because we are concerned about loss of value. That is our first order of business because we know that the crisis of 2008/2009 has left scars on people.
Earlier we were discussing about the loss of pension funds and so forth and we are determined that that value is preserved, but also it creates a sense of order as far as we are concerned so that we can really introduce gradually currency reforms that we think that in the end Zimbabwe ought to have.
If you go back to the Monetary Policy Statement on 1st October, we announced the separating of FC accounts to deal with commingling because we understood that United States dollars were by-passing the banking system. You have what we call a typical disintermediation which is a technical word, just by-passing the banking system. Our determination was that look, if we allowed for the separation of FC accounts people would then start banking in the banks, but also we are now beginning to see bond notes as well being banked.
There were other measures in terms of monetary policy reforms such as introducing a Monetary Policy Committee so that monetary affairs are better governed and also, we introduced a 5% reserve requirement to mop up liquidity and sterilise liquidity from the system so that it does not cause inflation and threaten again the value of the currency,
So Mr. President, we have a comprehensive road map, the way forward on the currency. I thank Hon. Sen Mudzuri. Thank you Mr. President.
HON. SEN. NCUBE: Minister, I do not think what you are saying is true.
THE HON. DEPUTY PRESIDENT OF THE SENATE: Order, ask your supplementary question.
HON. SEN. S. NCUBE: There is no multi-currency in this country because we are using bond notes. Can the Minister tell us which currency we are using? I last got US dollars last year in July. I thank you.
HON. PROF. M. NCUBE: Thank you Mr. President. For the record once again, we are in a multi-currency regime. The reference accounting currency has been the US dollar. I thank you.
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