Deputy Minister of Finance, Economic Development and Investment Promotion David Mnangagwa today officially opened the fifth edition of the Zimbabwe Economic Development Conference (ZEDCON) in Bulawayo, highlighting Government’s commitment to economic stability, financial inclusion and the eventual transition to a mono-currency system.
Addressing delegates, Deputy Minister Mnangagwa said Zimbabwe desired a stable and predictable domestic currency system but would not rush the transition before the necessary economic conditions had been fully satisfied.
“The desire is to have one currency, to bring stability and predictability and to make our lives as Zimbabweans easier, but we have to go through the journey to one currency,” he said.
Deputy Minister Mnangagwa said the transition would not be determined by an arbitrary date, but by the fulfilment of eight conditions outlined by the Reserve Bank of Zimbabwe to preserve value, strengthen confidence and address outstanding economic concerns.
“Until those conditions have fully and holistically been satisfied, it will be very difficult for us to transition to one currency in a way that satisfies citizens and businesses while addressing legacy issues,” he added.
He said existing US dollar-denominated agreements would be protected through the grandfathering of contracts, allowing them to continue being honoured in their original currency after the transition.
“What this means is that contracts which have already been signed and are denominated in US dollars will continue to be honoured in US dollars when the mono-currency system eventually prevails,” Deputy Minister Mnangagwa said.
He acknowledged that confidence lost through previous periods of inflation and currency changes could persist if it was not addressed through policy consistency, legal safeguards and continued engagement.
“We need to continuously reassure, as Government and policymakers, that what we have said is what we still mean. Whenever these concerns arise, we must respond, reassure and remain consistent with the promises that have been made,” he said.
Senior Economic Adviser to the Ministry of Finance, Economic Development and Investment Promotion Professor, Ashok Chakravarti said measures were already being implemented to strengthen the domestic currency and reduce borrowing costs.
He said the ZiG bank-policy rate had declined from 35 percent to 27.5 percent over the preceding six months, while a targeted finance facility carrying a 12.5 percent policy rate was available through banks to productive sectors.
