A man counts Zimbabwean dollar notes and coins next to a ten US dollar note on the streets of Harare. Picture: Tsvangirayi Mukwazhi/AP
INTERNATIONAL - Zimbabwean Finance Minister Mthuli Ncube said the country would not introduce new monetary notes to replace the quasi currency bond notes as yet, but would instead introduce replacement notes to address imbalances between cash in circulation and electronic money.

The move comes on the back of reports that Zimbabwe was ready to introduce new bank notes under the Zimdollar banner to replace the bond notes.

Ncube also reiterated yesterday that the Zimdollar remained constituted of bond notes, electronic funds and mobile money.

“The Zimdollar as things stand is basically bond notes, RTGS and bond coins. That is the official position - that is where we are,” he said.

Business leaders have said they are supportive of the new bank notes, while treasury sources say Zimbabwe will introduce Zimdollar notes before the end of this year.

Commerce companies such as retailers and wholesalers have also started to have in-house bureau de changes to manage exchange rate distortions fuelled by the parallel foreign exchange markets. Zimbabwe has banned usage of foreign currencies and Zimstats said on Wednesday the month-on-month rate of inflation had slowed down in July.

Zimbabwe banned settlement of transactions using foreign currencies in June this year, reintroducing the return of the Zimdollar in the form of bond notes and coins, mobile money and electronic funds.

Formal shops are compelled to only accept the local currencies, although currencies such as the rand and the US dollar continue to exchange hands in the informal market.

Treasury sources said they expected Ncube to be given permission by the central bank to introduce new Zimdollar notes before the end of the year. Officials have previously said the country would have its own currency before the end of the year. “It is a tightly managed situation,” said a treasury official.

In the meantime, Zimbabwe is hoping to plug foreign exchange rate distortions by strengthening the interbank market. This will further be enhanced by licensing of non-financial companies to run bureau de change outlets, with Econet Wireless launching a mobile money bureau de change.

Meanwhile online financial media service platform Equity Access says it has obtained suppressed statistics from Zimbabwe’s statistical agency (Zimstat) which implies that year-on-year inflation rate stands at 230.41percent as of mid-July.

Equity released the figures after Minister Ncube suspended the publication of these figures until February 2020, arguing that adoption of a new currency had impacted the base for calculating the consumer price index, Zim Live reported.

Zimstat said on Wednesday the country’s month-on-month inflation rate had fallen to 21.04percent in July compared to 32.96percent the previous month as prices of basic goods increased at a slower pace.

Annual inflation hit 175.66percent in June, the highest rate since runaway money-printing and associated hyperinflation forced the country to abandon its currency in 2009. Exxaro. 

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