- Published on 08 December 2014
- Written by Newsday
RESERVE Bank of Zimbabwe governor John Mangudya said the national financial institution's current plans are not looking at the re-introduction of the much-hated Zimbabwe Dollar.
Speaking on Thursday last week, The new RBZ boss said it would be careless to re–introduce the Zimbabwe dollar and the authorities had no such appetite because the current macro–economic fundamentals did not allow for such a move.
Speaking during the unveiling of the bond coins on Friday, Mangudya said the country had no coins to buttress the US dollars and to import the USD coins is expensive.
"We can never be so careless to return to the Zimbabwe dollar. It is very simple. It's easy for a country to start using foreign currency, but it is difficult to get out of it. So we won't be careless to do so. We have no appetite to do so and no plans to do so," he said.
He said 80% of transactions in the county are conducted with the United States dollars.
"It's natural the coins will be utilised much more than the South African rand as people would want to get value for their money," he said.
The bonded coins will be at par with the United State dollars and they can be exchanged for USD at the bank.
Mangudya said the coins came at time when most people in the rural areas were using barter trade as they did not have coins to transact with.
He said the adding of Chinese yuan, Indian rupees and Japanese yen into the economy has not been positive in the market.
"Alas, the demand for these currencies has not been high. The people prefer to use the United States dollars, rand and euros," he said.
Mangudya said the central bank would not do anything about the low usage of the currencies because it's a multicurrency system.
The country is expected to receive $10 million worth of bond coins between now and March which translate to 2% of total banking deposits.
Mangudya said the bond coins will be issued in 1c, 5c, 10c, 25c and 50c denominations. Mangudya said the 50c coin will be released in March next year due to the prerequisite features needed in the design and manufacture of the coin. The coins will be in circulation starting next week Thursday. Mangudya said in a functioning economy the proportion of coins to money in circulation should be between 20-25%.