Published by the government of Zimbabwe
8 August 2008
(Page 2 of 2)
Some people argue that businesses that are rejecting coins are doing so because they know that they cannot use coins when dealing in foreign currency on the parallel market, for this would mean the dealers moving around with bags of coins.
Two Herald readers have also questioned why the $500 was introduced when the RBZ has pegged the withdrawal limit to $200. They ask, how it will come into circulation, arguing also that this will fuel inflation.
Since the onset of the economic challenges, the RBZ has done a lot to restore stability in the economy.
However, there are many elements working against their commendable efforts. Endemic corruption is one of the biggest stumbling blocks.
People are "spinning" money at astonishing levels and the economy has moved to the informal realm and this makes it difficult for institutions like the NIPC to do their jobs properly and protect honest, hardworking Zimbabweans from speculators.
When the NIPC has a roundtable with the Zimbabwe National Chamber of Commerce and the Confederation of Zimbabwe Industries and other formal organisations, who represents entrepreneurs in the informal sector who are now in the majority, and whose goods and services are also used by the majority?
How does the State ensure that the revalued coins are not rendered worthless by the activities of unregulated individuals who are dollarising the economy?
The political climate
The major argument among some observers is that the introduction of the new currency will not in itself result in the stabilisation of the key macro-economic fundamentals until a political settlement materialises from the South African-brokered talks between Zimbabwe's main parties.
Things like sanctions will eventually take their toll on the new currency and it is hoped that a political settlement will also see an end to the economic embargo that is asphyxiating Zimbabwe.
And ultimately, it is hoped that a positive outcome in the talks will give the authorities more time and resources to effectively deal with the scoundrels who defy the law through their speculative activities and make it hard for honest folk to lead a decent life.
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