President Emmerson Mnangagwa
HARARE (Reuters) – Zimbabwe President Emmerson Mnangagwa said on Tuesday that the decision to ban the use of foreign currencies and make the interim currency the sole legal tender was needed to restore normalcy to the struggling economy.
“While the multi-currency regime helped to stabilise the economy, it did not give us control of monetary policy and left us at the mercy of U.S. dollar pricing, which has been a root cause of inflation,” Mnangagwa said in a statement.
He added that the government and central bank were taking steps to ensure the latest currency reforms were successful.
On Tuesday Mnangagwa endorsed the exclusive use the local currency in domestic transactions saying this will restore normalcy and enhance convenience to the public. The Government yesterday removed the multi-currency regime which had been in use since 2009.
Addressing journalists on the sidelines of the African Union – United Nations Wildlife Economy Summit here earlier today, the president clarified that the Government had not banned possession of foreign currency.
He said the country was in an abnormal situation and had now returned to normalcy where it had its own currency adding that there would be further pronouncements to inform the public on the implications.
“Zimbabwe has gone back to normalcy. The country must have its own currency. We have been living in an abnormal situation.
“We have removed the basket of currencies we had. Our currency is denominated by coins, notes and RTGS all that is domestic currency and can be used for transactions,” he said.
President Mnangagwa said those with foreign currency would have to exchange it for the local currency at bureaux de change while foreigners visiting the country could bring their Visa cards and swipe.
“Nothing much has happened. We have normalised. We shall continue to have pronouncements to inform people. Ukavona tofamba zvinenge zvagadzirika (We usually adopt such positions after careful consideration)” he said.
Government on Monday removed the multi-currency regime and restricted domestic transactions to local currency in an effort to enhance affordability of goods and services by the majority.
Government took the move after noting that the market was choosing to price a number of goods and services in US dollars when the majority of citizens were earning the local unit.