Central bank allays fears of Zimbabwe dollar return

A vendor receives a new $200,000 note from a buyer in Harare in an August 2, 2007 file picture. Zimbabwe's multiple-currency regime was introduced in 2009 to stabilise a shrinking economy characterised by hyper-inflation. FILE 

The Reserve Bank of Zimbabwe (RBZ) has moved in to allay fears that President Robert Mugabe is planning to resuscitate the local currency after winning last week’s elections.

Heightened market speculation about the return of the Zimbabwe dollar saw some banks running out of cash following a run on deposits.

But in a statement on Wednesday RBZ governor Dr Gideon Gono said the local currency would only be introduced when the economy had stabilised.

“This statement serves to emphatically dismiss those rumours and to confirm that there are no plans whatsoever, within and outside the bank, for the immediate or near-term introduction of new currency or re-introduction of the Zimbabwe dollar into our system,” he said.

“It may be the wishes of some stakeholders in debates, and this is a free country where freedom of speech, thought or wish is allowed, that the Zimdollar be returned immediately but these are just wishes.”

He said the multiple currency regime that was introduced in 2009 after the Zimbabwe dollar became worthless would continue for the foreseeable future.

He said the local currency will circulate alongside other existing currencies with people exercising their choice of currency to hold.

“Accordingly, market players and the banking community are urged to stop panicking and instead, get on with their boardroom strategies aimed at prospering their companies and selves in the wake of the new political realities, which have been ushered in by the recently concluded harmonised elections,” he said.

In the run-up to the elections President Mugabe promised a return of a gold-backed Zimbabwe dollar saying the country could not use the multi-currency system for ever.

Following the announcement of the election results at the weekend, the Zimbabwe Stock Exchange initially plunged by 11 per cent.

Zanu-PF has vowed to implement all its election promises that includes transferring the ownership of foreign banks to locals, a declaration that has left markets jittery.

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