New currency by December: President Mnangagwa
Zimbabwe will certainly have its own currency by December this year.
This was revealed by President Emmerson Mnangagwa as he addressed a rally in Harare’s Southlea Park suburb on Friday morning.
The rally was held after a clean-up campaign.
In April this year, while in Washington DC for the International Monetary Fund (IMF) and World Bank 2019 Spring Meetings, Finance and Economic Development minister Mthuli Ncube told United States-based Bloomberg Television that Zimbabwe would have a new currency “within the next 12 months.”
At the time, economist John Robertson yesterday said there was need for government to first create a conducive environment to sustain the proposed new currency.
“The main implication is that the country will not have foreign reserves to settle foreign debts,” Robertson said.
“We can’t sustain a new currency if we still have billions in foreign debt. The value will fall because you will constantly want to convert it. We will not have respect of the new currency,” he said.
Robertson said lack of respect of the currency will cause inflation, as the country has witnessed with the RTGS$ that was introduced in February. After holding firm at 1:2,5 for a few days, the RTGS$ has plunged and pushed up the prices of goods, raising fears that the country could be sliding back to the 2008 hyper-inflationary era when Zimbabwe experienced a record 179,6 billion percent inflation rate.
“Inflation comes because of the weakening of the currency, if the currency cannot hold its value, it will collapse. Creating a conducive environment to support a new currency should have come first. Let us have a new environment first,” he said.
United States-based economist and currency expert Steven Hanke took to Twitter to chide Mthuli Ncube immediately after the announcement, describing his decision to announce a new currency as “stupid”.
“Just when you think Zimbabwe could not pull another stupid rabbit out of the hat, it does so. Ncube says a new Zim currency in 12 months. What a stupidity,” Hanke tweeted soon after Ncube’s announcement.
Opposition MDC leader Nelson Chamisa also weighed in at the time, saying introducing a new currency without key economic fundamentals would not serve its intended purpose.
“The Zanu PF regime has to first address issues of market confidence, country-risk factor and legitimacy before even thinking of re-introducing the Zimdollar. Anything short of that would be a waste of resources and a mockery of people’s intelligence,” he said.
Chamisa added at the time: “We deserve decent dignified lives; prices of staples going up such as maize and wheat affect the prices of maize meal and bread. Prices of basic commodities going wild! School fees have been revised! The RTGS$/US$ rates are falling. Savings have been eroded. Workers’ salaries remain unchanged.”
More to follow… — ZOOMZimbabwe