Mthuli keeps faith with stabilising Z$  

Blessings Mashaya

WITH the prices of basic consumer goods in the country beginning to hold steady — on the back of the stabilising Zimbabwe dollar — Finance minister Muthli Ncube has reiterated that the nation will stick with the local currency as its main trading unit, the Daily News reports.

However, the much-coveted United States dollar will continue to trade side by side with the Zim dollar despite Ncube ruling out a return to full dollarisation.
This comes as both ordinary consumers and businesses alike have welcomed the increasingly stable prices of goods and services in the country — which are, nevertheless, still at high levels — following the recent introduction of the foreign currency auction system by the Reserve Bank of Zimbabwe (RBZ) to shore up the national economy.
Addressing Parliament on Wednesday, Ncube said the Zimbabwe dollar would remain the country’s main currency, ruling out a return to full dollarisation.
“Madam Speaker, let us not get too fixated on dollarisation and de-dollarisation. That cannot be the heart of economic debate in Zimbabwe.
“What should be the heart of economic debate is how stable our currency is. How can we make sure that our domestic currency becomes a store of value, not just something that is used for transacting.
“Madam Speaker, there was a poll that was conducted to find out how many people had US dollars and Zim dollars in their pockets. Most of the Zim dollars are in your phones.
“Everyone has a phone. So, I submit that we have more Zimbabwe dollars in this House than the US dollars. So, there is no need to talk about re-dollarisation in this country,” Ncube said.
He was responding to former Finance minister Tendai Biti who had said that the government needed to re-introduce the multiple currency regime to turn around the country’s economy.
“Madam Speaker, if you doubt what I am saying and you were to search all of us here, you will not find any of us with a single Zim dollar.
“All of us in this room have US dollars, including the minister himself because the economy has refused (to accept the Zim dollar).
“If you notice now the finance proposals that have been made by the minister in the last 12 months, they have all been following the USD,” Biti said.
“We are not pushing for the de-dollarisation of the Zim dollar. Let them exist side by side (US dollar) … but recognise
now that multiple currencies are legal tenders in Zimbabwe through the repeal of Statutory Instrument 142 of 2019 as codified by the Finance Act No. 2 of 2020 or No. 7 of 2019 which this House passed on 1st August, 2019,” he added.
This comes as the Zimbabwe dollar continues to hold steady on the recently-introduced foreign currency auction system, which the RBZ launched to stabilise the local trading unit and to bring down both inflation and the prices of goods and services in the country.
It also comes as economists have said that the prices of goods could remain stable as long as authorities also addressed other key economic issues that include production to stimulate growth.
Against this background, there is now a glimmer of hope among long-suffering Zimbabweans that the stabilising cost of basic consumer goods in the country will soon lead to more prices coming down.
On their part, business leaders have said that the current price stability could lead to prices coming down overall if authorities continued to stick to their current measures.
Since the launch of the auction system in June, the Zimbabwe dollar has lately begun to strengthen, albeit marginally, against the US dollar.
Before this, the local currency had collapsed spectacularly against major currencies — triggering steep price increases of basic consumer goods and services in the country.
Still, Zimbabwe remains in the throes of a debilitating economic crisis — its worst in a decade, which has been exacerbated by the deadly effects of the global coronavirus pandemic and the regional drought that has left millions of people in the country needing food aid.

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