More confusion as Mnangagwa comments on Zim currency

Currency confusion continued to reign in Zimbabwe after President Mnangagwa, on Friday, said the southern African country was working on having its own currency by end of year.

This is despite finance minister Mthuli Ncube having said the country already has its own currency – although it’s not “fully fledged”.

Zimbabwe currently uses a basket of currencies, mainly the local RTGS dollar, the US dollar and, to a lesser extent, the South African rand. This, Mnangagwa said, was causing price volatility, which has led to annual inflation of 75,8% for the month of April.

He said the country’s economy cannot flourish if it continues to use foreign currency as a medium of exchange.

“We have started the journey of having our own currency,” said Mnangagwa, in the local Shona language.

He said the economy was witnessing rampant price increases for the same “quality and quantity of products” as a result of the volatility in the local currency, which has lost more than 50% of its value since its introduction in February this year.

“This is because we do not have our own currency. There will come a time when the American dollars or British pounds will no longer be accepted as a medium of exchange.

“You will be allowed to keep it, but to buy, you will have to take our own currency, which we will make, you are going to be told about it,” said Mnangagwa.

His comments were, however, interpreted, even by state media, as if the country would introduce a completely new currency.

However, in its first quarter Treasury bulletin released last week, the Ministry of Finance reiterated that the country had introduced a new “currency called the RTGS dollar, which includes electronic balances in banks and mobile platforms, bond notes and coins”.

“The RTGS dollar is now the new reference currency for the purposes of pricing of goods and services and accounting,” it said.