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Oliver Kazunga/Bulisile Mguni Chronicle Reporters
Economic analysts yesterday lauded the progress made towards demonitisation of the Zimbabwe dollar and urged the general public to surrender old currency to monetary authorities.They dismissed fears that this may be a ploy to bring back the local currency, saying it was impossible for the government to bring back the ZW$ using old notes.

An economic commentator and businessman Luxon Zembe said the exercise was long overdue.

“The demonitisation of the Zimbabwe dollar is a very good initiative by the RBZ as there is need to retire the old currency. There’s no way the monetary authorities would try to bring back the Zimbabwe dollar using the old currency as from an economic point of view that currency had higher denominations which were applicable in the hyperinflationary environment,” said Zembe.

“If the government’s intention is to bring back the Zimbabwe dollar, it would simply print a new currency with a reasonable value against the US dollar,” an economist with a leading financial institution who preferred anonymity said:

“The underlying message is that the government wants to give the public that the Zimbabwe dollar has been weaned off. The public might be looking at this move from a monetary value to say the exchange rate that has been used isn’t enough but one should also consider that at the time we dollarised the local currency was not worth much against the United States dollar,” said the economist.

“Remember at the height of hyperinflation we had denominations of up to a trillion. Given the stability in the economy where inflation is very low, introducing the Zimbabwe dollar from such denominations is not applicable as inflation is no longer an issue at the moment. If the government wanted to introduce the Zimbabwe dollar, it could simply do so using good quality paper not from that poor quality paper on the old notes. The message is quite clear that the government is weaning off the Zimbabwe dollar.”

On the exchange rate being used, the economist said it was “fair” taking into consideration that the local currency had lost value against the United States dollar. At the time of hyperinflation, total bank deposits were said to be US$300 million which signifies that the Zimbabwe dollar was worthless against the US dollar

“And to buttress that the Zimbabwe dollar was worthless, our total bank deposits are at US$4 billion because we’re using a currency with value. So for the monetary authorities to come up with such an exchange rate, in my view, it is fair,” said the economist.

Buy Zimbabwe chief economist Kipson Gundani said the fact that some people were reportedly unwillingly to return the old currency was a reflection of a confidence gap in the economy.

Some Bulawayo residents appeared confused on the matter as they said the amounts being given were too little.

“I will not give away my notes for such a small amount. By giving the RBZ these notes we are surely facilitating the introduction of bond papers since we now have bond coins,” said Hlanganani Ndlovu.

Mirriam Terera, 73, said: “The RBZ wants to trick us. These very same notes will be brought back and we will go back to Zimbabwean dollar era.”

Lucy Madhuku, 61, said: “I can’t buy groceries for my family with only $5. If only the RBZ can re-work this and look for a way to try and give us a fair value for our money.”

Said Ayanda Masuku: “Now I get to be given my money back which lost value before I even used it. I commend the RBZ for this because at least at the end of the day I’m getting something.”