Zimbabwe dollar may not be perfect but it is here to stay- RBZ

The Zimbabwe dollar is here to stay and there is already stronger demand for the local currency, Reserve Bank of Zimbabwe deputy governor Jesimen Chipika said.

There has been chaos, with prices going up almost every day, since the local currency was reintroduced in June.

President Emmerson Mnangagwa is meeting business next week to discuss prices.

The main opposition insists that re-dollarisation is the answer but Chipika said the multi-currency regime was abandoned because it was not promoting exports and production.

Instead, opportunities for arbitrage went out of control.

“The opportunities for arbitrage were totally out of control,” she said according to the Independent.

“This led us to the June 24 decision (to introduce the local currency). Multicurrency was no longer working in our country, we had to go back to the mono-currency. The Zimdollar helped hold other worries of post-dollarisation.”

She added: “The Zimbabwe dollar may not be perfect but we are getting there. We have seen the reduced trading of foreign currency on the black market and we are seeing stronger demand for the local currency.”

The gap between the black market rate and the interbank rate has narrowed to a few dollars with the black market rate currently at 20:1 while the interbank rate averages 15:1.

The black market rate was for some time double the interbank rate.

The US dollar bond (cash) rate is even lower at 13.5: 1.

The country is, however, facing an acute shortage of cash and has frozen the accounts of several companies which were accused of fuelling the back market.

Treasury was supposed to plough in $400 million before the end of the year but the government dismissed reports that new notes would be released next month.

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