30 January 2014

Zimbabwe: More Currencies Added to Basket

Photo: IRIN
Zimbabwe dollars

AS trade and investment ties between Zimbabwe and the Asian countries continue to grow, the Reserve Bank of Zimbabwe has widened the foreign currency basket to include four more currencies. Zimbabwe adopted a multi-currency regime on January 29 2009 in the wake of the sanctions-induced collapse of the Zim dollar, and of the four currencies adopted - the South African rand, the Botswana pula, the British Pound Sterling and the US dollar -- it is the greenback that has become the main medium of exchange.

Announcing the 2014 Monetary Policy Statement yesterday, acting governor Dr Charity Dhliwayo said exporters and the general transacting public could now open accounts denominated in Australian dollar, Japanese yen, Indian rupee and Chinese Yuan.

Zimbabwe adopted the "Look East" policy after falling out with Western countries over the country's land reform programme.

The policy has resulted in more companies from the region investing in the country.

Last year, the Zimbabwe Investment Authority approved investments worth US$685,8 million, with China constituting more than 50 percent of the proposed projects.

Most proposals were from mining investors with US$214 million investment projects having been approved.

Several Japanese companies have visited Zimbabwe to scout for investment and business opportunities.

"Trade and investment ties between Zimbabwe, China, India, Japan and Australia have grown appreciably," said Dr Dhliwayo.

"It is against this background of growth in trade and investment ties that in the 2014 National Budget, the Honourable Minister of Finance and Economic Development underscored the importance of including other currencies in the basket of already circulating currencies.

"In this regard, we wish to advise exporters and the general transacting public that in addition to opening of accounts denominated in Botswana Pula, British Pound Sterling, Euro, South African Rand, United States Dollar, individuals and corporates can also open accounts denominated in the Australian dollar, Chinese Yuan, Indian Rupee and Japanese Yen.

Dr Dhliwayo said the country will continue using multiple currencies.

"This should put to rest the widespread speculation surrounding this subject," said Dr Dhliwayo.

"As such, the Reserve Bank, in close collaboration with Government, has no plans to re-introduce the Zimdollar as widely speculated."

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