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THE unveiling of special coins into the market by the Reserve Bank of Zimbabwe is commendable as this will go a long way in easing the problem of change that has been haunting the country in the past five years. While addressing the problems of divisibility on the market, the introduction of coins will also resolve the issue of the store of value qualities of money.
Last week, the Reserve Bank of Zimbabwe introduced a set of new bonded coins worth $10 million, which will start circulating on December 18, 2014.
Since the adoption of a multicurrency system, which is dominated by the United States dollar and South African Rand in February 2009, Zimbabwe’s economy has largely been affected by the shortage of change resulting in the transacting public being shortchanged by retailers.
Due to the problem of change, at times consumers upon transacting were being forced to get sweets in exchange for their change.
To some extent, it has been observed that the problem of change caused businesses to sell their goods and services at higher prices.
However, it is envisaged that once the bonded coins start circulating, the problem of change will now be a thing of the past.
The special coins which will circulate in denominations of 1c, 5c, 10c, 20c, and 50c would have their values being at par with the United States cent.
The 50c coins shall be released into the market in March next year due to the prerequisite security features needed in the design and manufacture of this coin.
Central bank governor Dr John Mangudya during a press briefing in Harare last week told journalists that the special coins were part of a five year $50 million bond government had secured to give them value.
“The bond coins derive their name from the US$50 million bond coin facility the Reserve Bank arranged for the purpose of providing the coins with intrinsic value. The bond coins would be a good store of value. Consumers and businesses would be able to exchange the coins for paper money at their banks…,” he said.
Organisations such as the Consumer Council of Zimbabwe, have given the thumbs up to the monetary authorities for introducing the special coins saying the unveiling of the coins would stop retailers from shortchanging consumers of their change.
“Since the introduction of the multi-currency system, many people have lost a lot of money as they’re told there’s no change,” said CCZ executive director, Rosemary Siyachitema.
“If we’re to calculate the value of the money lost through change we would find out that more could’ve been done with that money.
“We’re very glad RBZ is importing coins to ease the problem consumers have been facing, now that money can be used for other causes”.
Siyachitema said consumers should report retailers who refuse to give them change.
“No one should accept being given sweets in exchange of their money. Consumers should report to us so that we also report to the proper authorities to deal with the culprits,” she said.
Dr Mangudya said the economics of the bond coins was being introduced to buttress the multicurrency system through the provision of change especially for the United States dollar notes which have smallest denomination in circulating in the country of $1.
He assured the nation that the introduction of the bonded coins does not signal the return of local currency.
Again this is commendable, as reverting to local currency is tantamount to creating a host of challenges that were curtailed through the adoption of a multicurrency system.
Market watchers have pointed out that the return of the Zimbabwe dollar should not be something imminent as doing so before the economy is able to sustain itself is suicidal.
In his mid-term fiscal policy review, Finance and Economic Development Minister Patrick Chinamasa hinted that government had no appetite to shift from the multicurrency policy urging the nation to take comfort in the continuous re-assurance from both the monetary and fiscal authorities.
The move to introduce special coins is not peculiar to Zimbabwe as the country once used the currency board in 1938.
A currency board is a monetary authority which is required to maintain a fixed exchange rate with a foreign currency.
It is also important to highlight that the introduction of bonded coins in Zimbabwe should not be seen as a ploy to smuggle the return of the local currency.
Ecuador and East Timor in 2000 and 2003 respectively took the same route after dollarising their economies as a measure to solve the problem of change.
Bongani Ndlovu
Online Reporter