RBZ shoots down dollarisation , says 70% of US$ belongs to miners

Business Reporter

 Victoria Falls THE Reserve Bank of Zimbabwe (RBZ) has revealed that 70% of the foreign currency export earnings are generated by miners amid calls for citizens to forego demands for full scale dollarization of the economy.

The remarks come against a backdrop of widespread calls by members of the public for government to abandon the ZW$ in favor of the greenback following rapid devaluation of the local currency on both the official and parallel markets.

Owing to the 2008 hyperinflationary era’s memories, businesses in Zimbabwe are quick to react in times of exchange rates depreciation, often pegging basic goods and commodities prices much higher than the obtaining parallel market rates in anticipation of further local currency depreciation.

In the process, such a business culture worsens the situation and pushes citizens to the margins of poverty as they are left in a situation where they can’t afford basic commodities.

Addressing delegates at the Chamber of Mines Zimbabwe organized conference, RBZ governor, Dr John Mangudya revealed the bulk of foreign currency circulating in the economy belongs to miners.

He said over 70% of the country’s exports come from the mining sector and the money generated does not belong to Treasury as opposed to the general notion that the country generates enough foreign currency to be able to dollarise.

“I want to applaud the mining sector for supporting the economy as it has helped revive the manufacturing sector and ignited life into some companies whose premises had for some time been turned into churches.

 “It is just a few individuals and exporters that want the economy dollarized and move away from multi-currency system. Because you are consistently exporting, people say we can now dollarise.This money is not ours –it belongs to the exporter.

“It means that we have no capacity to dollarize because already we have a shortage.”

The central bank chief called on citizens to have confidence in the ZWL amid a surging appetite for the greenback in the economy.

 “What it means is that what people are asking for, we have no capacity to dollarize. We have more than US$2, 4 billion in our deposits and of those deposits, US$1, billion is in banks as liquidity for them to fund their customers.

“That money belongs to few people and companies that are the largest exporters .Most of the money belongs to the mining sector,” added Mangudya.  

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