What currency is Zimbabwe using right now opposition leader asks Mthuli Ncube?

What currency is Zimbabwe using right now opposition leader asks Mthuli Ncube?

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Opposition leader Elias Mudzuri

Opposition leader Elias Mudzuri yesterday took Finance Minister Mthuli Ncube to task to explain what currency the country was using since there were bond notes, RTGS, Nostro US$.

Ncube said Zimbabwe was using a multi-currency regime. Bond notes and RTGS dollars were at par with the United States dollar.

He said foreign currency accounts were only re-introduced to get US dollars into the banking system as they were bypassing banks.

“We have a multi-currency regime.  We have pronounced that this is here to stay.  That is the currency regime we are using now and the reference accounting currency in terms of our budget is in United States dollars and we have guaranteed a 1:1 conversion in terms of United States dollars and other forms of payment,” Ncube said.

“We announced that.  The reason why we are doing that is because we are concerned about loss of value.  That is our first order of business because we know that the crisis of 2008/2009 has left scars on people.

“Earlier we were discussing about the loss of pension funds and so forth and we are determined that that value is preserved, but also it creates a sense of order as far as we are concerned so that we can really introduce gradually currency reforms that we think that in the end Zimbabwe ought to have.

“If you go back to the Monetary Policy Statement on 1st October, we announced the separating of FC accounts to deal with commingling because we understood that United States dollars were by-passing the banking system.

“You have what we call a typical disintermediation which is a technical word, just by-passing the banking system.  Our determination was that look, if we allowed for the separation of FC accounts people would then start banking in the banks, but also we are now beginning to see bond notes as well being banked,” he said.

Mudzuri is the deputy president of the main opposition Movement for Democratic Change but he is the leader of the opposition in the Senate.

He was, however, not satisfied with the response and the time he was given to question the minister.

Below is the full Q & A:

HON. SEN. ENG. MUDZURI:  On a point of order, Mr. President.  I asked a question which he has not answered in his statement.  I said I wanted to ask a follow up question and then he said he was going to give a statement and that question has not been answered in that statement.

THE HON. DEPUTY PRESIDENT OF THE SENATE:  Alright, you can ask the question again.

HON. SEN. ENG. MUDZURI:  It is here, I can repeat it because if you answer this, I will be able to discuss what you have said.  Before I seek clarification, I wanted the Minister to tell me what currency he is budgeting on, what currency we are using in the country because when he was giving his statement, he is also saying people might be asked to pay for their taxes in United States dollars.

THE HON. DEPUTY PRESIDENT OF THE SENATE:  Just ask your question.

HON. SEN. ENG. MUDZURI:  My question is simply that when he tells me what currency we are using now, then I will clarify on his statement.

HON. PROF. M. NCUBE:  Thank you Hon. Mudzuri for that question.  We have a multi currency regime.  We have pronounced that this is here to stay.  That is the currency regime we are using now and the reference accounting currency in terms of our budget is in United States dollars and we have guaranteed a 1:1 conversion in terms of United States dollars and other forms of payment.  We announced that.  The reason why we are doing that is because we are concerned about loss of value.  That is our first order of business because we know that the crisis of 2008/2009 has left scars on people.

Earlier we were discussing about the loss of pension funds and so forth and we are determined that that value is preserved, but also it creates a sense of order as far as we are concerned so that we can really introduce gradually currency reforms that we think that in the end Zimbabwe ought to have.

If you go back to the Monetary Policy Statement on 1st October, we announced the separating of FC accounts to deal with commingling because we understood that United States dollars were by-passing the banking system.  You have what we call a typical disintermediation which is a technical word, just by-passing the banking system.  Our determination was that look, if we allowed for the separation of FC accounts people would then start banking in the banks, but also we are now beginning to see bond notes as well being banked.

There were other measures in terms of monetary policy reforms such as introducing a Monetary Policy Committee so that monetary affairs are better governed and also, we introduced a 5% reserve requirement to mop up liquidity and sterilise liquidity from the system so that it does not cause inflation and threaten again the value of the currency,

So Mr. President, we have a comprehensive road map, the way forward on the currency.  I thank Hon. Sen Mudzuri.  Thank you Mr. President.

HON. SEN. NCUBE:  Minister, I do not think what you are saying is true.

THE HON. DEPUTY PRESIDENT OF THE SENATE: Order, ask your supplementary question.

HON. SEN. S. NCUBE:  There is no multi-currency in this country because we are using bond notes.  Can the Minister tell us which currency we are using?  I last got US dollars last year in July.  I thank you.

HON. PROF. M. NCUBE:  Thank you Mr. President.  For the record once again, we are in a multi-currency regime.  The reference accounting currency has been the US dollar.  I thank you.

THE HON. DEPUTY PRESIDENT OF THE SENATE:  We are not in the normal question time which we normally have on Thursdays.  We are seeking clarifications from the Minister.  So, there is no supplementary question once somebody has asked their question.  If you want to ask another question you just stand up.  I had recognised Hon Members in order so allow me to finish the people I have on my list then I will come back to fresh ones. In the interest of being fair, I started with Hon Sen. Mudzuri now it is Hon. Sen. Makoni.

HON. SEN. ENG. MUDZURI:  On a point of order.  I think you are being unfair to us.  We were stopped from asking questions and were told to seek clarification.  Asking and seeking clarification is the same.  Mr. President, we were waiting for the Minister of Finance and Economic Development for more than three weeks.  As the Leader of the Opposition, I think you must allow us to seek clarification because we went out failing to ask questions.  I asked Madam President why the Minister was not answering the currency issue.  The whole budget and his speech are based on the currency we are using.  If we forget that the currency we are using today – we were doing budget yesterday and we were wondering what currency we were using both you and me.  The Minister has admitted…

THE HON. DEPUTY PRESIDENT OF THE SENATE:  Senator Mudzuri, we have got rules which we follow.  We have a statement which the Minister has made and now I am giving you the opportunity in terms of our Standing Rules and Orders to seek clarification from the Minister and I have given the order of the people who are going to seek clarifications.

HON. SEN. ENG. MUDZURI:  Mr. President, it does not help to give an order.  I asked a question and I am following up after he answered the question.

THE HON. DEPUTY PRESIDENT OF THE SENATE:  He has answered the question.

HON. SEN. ENG. MUDZURI:  No, people do not understanding his answer.  He has not answered the question properly in the sense that there is RTGs, Nostro US$, bond and all these things are happening in the market. As we are doing a budget today and going for the budget, we wanted clarification on the currency we are budgeting on and also what should be used outside. If we do not have that I can laugh at this whole statement and say Hon. Ncube we might be headed for a disaster because you have not looked at your terrain. If you do not first answer the question on the meaning of RTGs US$ account or Nostro account.  If you go to the bank tomorrow that is what you are told.

THE HON. DEPUTY PRESIDENT OF THE SENATE:  Hon. Sen. Mudzuri, I have to stop you at that stage.  The Minister has answered for your benefit.  I will ask the Hon. Minister to answer your question again.  Minister would you like to answer that question again.

HON. PROF. M. NCUBE:  I have already answered the question Mr. President.  Let me thank again Hon. Se. Mudzuri for that question.  We are in a multi-currency regime.  That is the official position.  We have guaranteed a one to one equivalent and I urge you to use the US dollar as your accounting currency.  Accounting currency I repeat.  We have always done that so, please let us maintain that.  I thank you Mr. President.

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