Govt will this week introduce new currency not backed by any reserves: Former Finance Minister Biti


Former Finance Minister Tendai Biti posted on his twitter that the government of ED Mnangagwa was likely to introduce a new currency this week. Tendai Biti a member of Parliament and a Public Accounts and finance committee member is well positioned to have a deeper insight into the financial affairs of the nation.

Former Finance Minister Tendai Biti

Biti posted the following 3 part thread below:

1)The regime will this week introduce a new Zimbabwe currency not backed by any #reserves & without the context of structural reforms which a prerequisite of currency reform .That move is pure undiluted #insanity . An unbanked currency is just the #bond note by another name

2)There is no country in the world that has involuntarily dollarized that has ever succeeded in de -dollarizing. Zim will not be the 1st .Whilst a currency is about fundamentals ,ultimately the most important fundamental is confidence There is absolutely no trust in this regime

3) Considering the #harm and #damage inflicted on this economy by its Central Bank over the years to now , the question to be posed is , does Zimbabwe really need a Central Bank ?. In my submission, it can and will do without one .

Contacted for comment a senior government official confirmed that a new currency was on the cards but could not comment as to whether it will be introduced this week. The senior government official said the nation will have to wait until the next cabinet meeting, as such a decision will require cabinet approval and input.

The new currency was reportedly printed in China last year. Finance Minister Mthuli Ncube told a town hall meeting last month that a new local currency would be introduced in less than twelve months. He however hesitated to tell the meeting that the currency was already on its way.

“On the issue of raising enough foreign currency to introduce the new currency, we are on our way already, give us months, not years,” he said.

Locals are haunted by memories of the Zimbabwean dollar, which became worthless as hyperinflation spiralled to reach 500 billion% in 2008, the highest rate in the world for a country not at war, wiping out pensions and savings.

A surrogate bond note currency introduced in 2016 to stem dollar shortages has also collapsed in value.

President Emmerson Mnangagwa is under pressure to revive the economy but, in something of a vicious circle, the dollar shortages are undermining efforts to win back foreign investors sidelined under his predecessor Robert Mugabe.

More to follow …

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