Zimbabwe’s multi-currency system ‘here to stay’

Zimbabwe's central bank will start circulating local bank notes in October - but the country will also use the dollar and other foreign currencies.

Harare - Zimbabwe's central bank will start circulating local bank notes in October, but the country will continue to use the dollar and other foreign currencies and will not be returning to a domestic currency abandoned in 2009, its governor said on Monday.

Zimbabweans are worried that introducing “bond notes” to ease dollar shortages could open the door to rampant printing of cash, as happened in 2008 when inflation hit 500 billion percent, wiping out savings and pensions.

Read: Zimbabwe resorts to bond notes amid cash crunch

Reserve Bank of Zimbabwe governor John Mangudya described the local notes as vouchers meant to boost exports and generate foreign exchange and dismissed talk of a return to the local currency as “unfounded rumours”.

“The export vouchers are expected to be disbursed in October 2016. The multi-currency system is here to stay,” he said in a statement.

“We have assured the public before and we would like to continue to do so that the country's economic fundamentals do not support the return to the Zimbabwe dollar.”

Zimbabwe has faced a shortage of bank notes since March, unnerving depositors who fear the central bank may turn on the printing presses again and render their cash worthless.

Long queues continue to form outside banks, which have imposed daily withdrawal limits as low as $50.

REUTERS