Zimbabwe to circulate new dollar note and coins to fight cash crisis
The Zimbabwe dollar will officially be on the market in a fortnight in batches of $2 coins and $5 notes, says the country's Reserve Bank governor John Mangudya.
Speaking to journalists at a press briefing for the monetary policy committee (MPC) meeting in Harare on Tuesday, Mangudya said the move was part of measures to ease cash shortages.
The notes and coins will circulate together with bond notes and coins. He estimated that the country's cash crisis would be dealt with within the next six months.
"The committee felt that there was a need to boost the domestic availability of cash for transactional purposes through a gradual increase in cash supply over the next six months,” said Mangudya.
"The new note should do away with the queues at the banks and people then should have adequate money for daily use."
Currently there is a two-tier pricing system for goods and services, although it is illegal. Those who pay for products using cash get a 30% discount at most establishments. The exchange rate for cash into foreign currency is therefore more favourable than the rate for real-time gross settlements (RTGS).
The introduction of the currency falls in line with what MPC member Eddie Cross told journalists last month - only for the Reserve Bank to declare that “he did not speak" for the bank in any capacity.
But speaking to journalists last week, finance minister Mthuli Ncube raised concerns that increased economic activity should keep the local currency stable - or else they could find themselves compromised by printing more money to fund government activities and responsibilities, such as paying salaries.