Online Reporter
Rutendo Nyeve, [email protected]
THE Reserve Bank of Zimbabwe (RBZ) has reassured the mining sector that the planned transition to a mono-currency will not erode the value of financial assets and contracts denominated in foreign currency.
Speaking at the recent Annual Mining Conference in Victoria Falls, RBZ Deputy Governor Dr Innocent Matshe delivered a firm guarantee that existing foreign currency accounts, US dollar-denominated pension fund holdings, and equities, including those listed on the Victoria Falls Stock Exchange (VFEX), will be safeguarded.
“I want to be categorical that the idea of people losing the value of their balances in accounts when we move to mono-currency is an issue that should not bother the public,” he said.
“No balance, not even a penny, will be exchanged for any other currency without the owner’s consent and without the owner’s participation.”
The Deputy Governor’s address sought to clarify the nature of the currency transition, stressing that the local currency will be used exclusively for domestic transactions, while foreign currency will remain accessible for external payments.
Dr Matshe further said the transition does not entail doing away with foreign currency accounts or changing the denomination of existing contractual obligations.
The preservation extends to foreign currency loans and advances made to domestic individuals and non-exporting corporates, which shall remain denominated in foreign currency.
“The idea is that foreign currency-denominated accounts will continue into mono-currency. The only time that those balances will be exchanged for local currency is when and if the holder of that account wants to do so,” said Dr Matshe.
This assurance is in line with the National Development Strategy 2 (NDS2), which explicitly states that all prior contractual obligations, including bank loans and advances made prior to the final date, will be preserved and honoured and economic agents will not lose money or value due to the transition to mono-currency.
The Deputy Governor reiterated that under the new mono-currency framework, domestic products and services will be exclusively paid for and settled in local currency.
However, he clarified that this does not mean a compulsory conversion of savings, as Zimbabweans will still be able to utilise their foreign currency accounts through a seamless digital system.
Dr Matshe illustrated this by stating that if a consumer does not have enough local currency in their account at a point of sale, they can request funds to be moved from their Foreign Currency Account (FCA) into their local currency account to complete the payment, ensuring no loss of value.
Dr Matshe’s comments come as the central bank works to restore confidence in the financial system following the introduction of the Zimbabwe Gold (ZiG) currency.
He said macroeconomic stability is currently being supported by disciplined fiscal and monetary policies, with money supply growth largely consistent with inflation and GDP growth expectations.
The central bank’s reserves are also reported to fully cover ZiG reserve money and banking sector deposits, offering a critical shield against external shocks.
