Zimbabwe is to inject $1 billion over the next six months and thus double cash in circulation in the country.
Currently it only has $855 million in circulation against an estimated demand of between $1.5 billion and $2.25 billion.
The serious cash shortage has led to people selling cash at a big discount to those with electronic money thus bringing back a three –tier pricing system, for cash, electronic money and the United States dollar which remains the favoured currency though the government declared the Zimbabwe dollar the sole currency for local trade in June.
The country is introducing new notes and coins this month but will maintain the highest note at $5 dollars to promote the use of digital money for paying huge sums.
Zimbabwe introduced a multi-currency regime in 2009 and is battling to get the local currency to be accepted.
President Emmerson Mnangagwa, however, yesterday defended the introduction of the new currency saying no country could develop without its own currency.
“The course we have taken as a party and Government to resuscitate and reform our economy is the correct one, never doubt that,” he said according to the Herald.
“We must strengthen our resolve to correct wrong decisions we made with regards to our economy. No country can succeed, grow or modernise without its own currency.
“The issue of a basket of currencies we introduced towards the end of 2009, the culprits were me and (Patrick) Chinamasa and a few others. It worked for the purposes it was created but now under the Second Republic we want to move forward and be a sovereign State with its own currency.”
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