Mthuli Ncube: No Dollarisation, New Currency for Zimbabwe

Minister of Finance and Economic Development Mthuli Ncube has said the government is not going to dollarize the economy as this would be admitting defeat. 

Ncube also hinted that the government will be introducing its own currency within the next 12 months. 

The minister, however, said that the move will be done stealthily. Speaking at the Global Shapers Community meeting held at the Celebration Center.

“We should be close on currency reforms. It will happen by stealth because we can’t. Currency reforms started in October 2018 but we didn’t have fiscal discipline in place. We won’t capitulate to the USD but have currency reforms.

We are less than 12 months away from currency reforms. I am now comfortable with the fiscal side in austerity measures.
Mthuli Ncube

I even contemplate easing taxes in the next 2/3 years. We can’t have austerity forever. What’s left now is the heavyweight lifting on the monetary policy side. Dollarisation would be capitulation. We need own currency”

Ncube, who is in New York for the United Nations General Assembly, told Bloomberg TV in an interview that bond notes would remain in circulation until “fundamentals are conducive for the introduction of a local currency”.

“Over time, we will move back to a domestic currency, but that requires certain steps like fiscal consolidation around government expenditure and on the revenue front,” he said.

“The renowned economist and former banker said Zimbabwe needed a stabilisation plan to be implemented within the shortest possible time.

Ncube said Zimbabwe was banking on increased tobacco, gold, chrome and platinum exports as it worked on plans for a new currency.

“There is no time frame, but we need these things to happen sooner than later,” he said.

“We need certain triggers such as that we need to have a full momentary policy committee that is working and be able to move to a market-based allocation of foreign exchange so that those who are exporting are able to have their accounts in foreign currency and keep those as their receipts and build those blocks of reserves.”

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