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- Zimbabwe Finance Minister has no plans to make US dollar the sole currency of the nation
- The government of Zimbabwe believes that adopting USD solely could be suicidal
- The Zimbabwean government is more focused on strengthening their local currency Zimdollar
Zimbabwe, the country located in South East Africa, has no plans to make USD its sole currency. According to Mthuli Ncube, the Finance Minister of the nation, the idea of making the United States dollars, their sole currency, is suicidal. Moreover, the Finance Minister also confirmed to the business leaders in the region that he has no plans to make USD, the sole currency of the nation again. Rather, Ncube believes that the nation should focus more on defending the value of its own zimdollar. Notably, the Zimbabwean Minister made such comments while speaking at a pre-budget seminar, that was held in the Victoria Falls.
Zimbabwe focuses on to strengthen its local currency
The Finance Minister of Zimbabwe has recently ruled out adopting USD as the nation’s sole official currency. The Sunday Mail released a report citing that the Zimbabwean Finance Minister made such comments while speaking on at a pre-budget seminar. Ncube believes that rather than entertaining such calls for dollarization of the national economy, it is suggested that the government is in fact focused on strengthening the value of the local currency.
Ncube noted that since the reintroduction in 2019, when the nation was briefly in parity with the USD, their local currency witnessed its official exchange rate against the USD dropping to more than ZWL$90 for each $1. Notably, on the parallel market, the value of a dollar is more than ZWL$160.
USD caused foreign currency deficits and deflation
The vast difference between the parallel and official market exchange rates has prompted one of the nation’s biggest business lobbies to sound the alarm. Although the Zimdollar is continuing to plunge with caution by businesses, the National Finance Minister quotes that he is against dollarizing their national economy again. Ncube further explained to business leaders that it is not possible to adopt the United States dollar alone as the official currency.
Moreover, the Zimbabweans were there before, and witnessed queues at traditional banks, tremendous foreign currency deficits, and also the country faced deflation. According to Ncube, Zimbabwe had to face all such scenarios because of the United States dollar. Hence, it is expected that adopting the USD is not a good idea, and could be suicidal for the nation.
Businesses should not reject Zimdollar
According to the report released by the Sunday Mail, in the seminar, the Zimbabwean Finance Minister also noted the increasing industrial output as one of the achievements after the re-issuance of their local currency. Ncube, further explained to the participants in the seminar, that the government wants them not to reject the local currency.
In the currency scenario, the nation is using both USD and Zimdollar, which shows shifts one way or the other. Hence, the government is trying to stabilize the Zimbabwean dollar and has done it well to ensure salaries are not eroded.
On the other hand, it is observed that the USD is performing the role of a savings and investment currency in the country. In contrast, Zimdollar is performing the role as the transactional currency rather than an investment one.
