'No money to demonetise Zimdollar'

'No money to demonetise Zimdollar'
Published: 22 July 2014
Patrick Chinamasa, the Finance minister, yesterday said government was not yet ready to compensate depositors who lost their money held  in banks during the  change-over from local to the multiple currency system in 2009.

Chinamasa told the parliamentary portfolio committee on Finance that he was yet to receive a correct  formula on how he could compensate the depositors.

The committee, chaired by Zanu PF MP David Chapfika, had asked Chinamasa whether there was any progress on the demonetisation.

"I am inviting MPs to come up with the solution and as of today, nobody has offered me the solution on demonetisation," Chinamasa said.

"It is a problem we are having and we are seized with as government and we cannot wish it away, because people want their money but at the moment we are not able to act on it."

Zimbabwe abandoned its local currency in 2009 in favour of multiple foreign currencies, including the US dollar and South African rand, to help contain hyper-inflation.

A committee comprising officials from government and the Bankers' Association of Zimbabwe was set up to work on the requisite details and modalities to operationalise the process.

Initial projections said funds for the demonetisation programme were estimated at $6 million.

The demonetisation of the Zimbabwe dollar effectively ended its role as a unit of account, medium of exchange and store of value and reduced the country's currency regime to a dual currency system anchored on the South African rand and the United States dollar.

Chinamasa said the US dollar has been undervalued."We have undervalued the US currency," Chinamasa said. "For example, $1 buys four bottles of Coca-Cola in the USA but here we can only buy two bottles.  This is the undervaluing that  has caused  price distortions in the economy."
- dailynews
Tags: Zimdollar,


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