The Reserve Bank of Zimbabwe (RBZ), will print an extra $400 million in bond notes and coins to cover the gap left by the withdrawal of hard currencies, Governor John Mangudya said Wednesday.
On Monday, government, in a shock move, announced the multi-currency regime that had obtained for a decade would be abolished with immediate effect, designating the Zimbabwean dollar as sole legal tender for all local transactions.
Mangudya was however quick to allay fears of inflation indicating the RBZ is cognisant of the consequences of unguarded printing of money.
"As we move towards a cashless society, we still need about $400 million to allow people to access cash, so we are going to print that money to cover that gap left by the removal of the multi-currency system," Mandudya told a state run radio station from China.
"We will not print up to levels that will cause inflation as feared by some people."
Mangudya said Zimbabwe's economy requires around $1.5 billion in cash and currently has between $600-$800 million in bond notes that are not enough for use by the transacting public.
"Currently, we have about $6-800 million in bond notes and coins. This economy requires about 10% of all deposits in liquidity which comes to about $1-1.5 billion.
"So we will definitely bring in notes and coins in the value of around $400 million," he said.
The RBZ governor also said that diaspora remittances should continue to be received in foreign currency and no bank has been instructed not to pay customers from their Nostro accounts.
He also dismissed claims that the Central Bank will raid ordinary people and business foreign currency accounts.
"Recipients of diaspora remittances and other foreign currency payments will still withdraw in hard currencies or choose to get it in Zimbabwean dollar at an interbank rate," he said.
According to a statement from the RBZ, non-governmental organisations, embassies and other foreign organisations will not be affected and can continue paying salaries in foreign currency.