Mangudya speaks on ‘special coins’

Posted on Aug 29 2014 - 10:12am by admin

By Kudzai Chawafambira

HARARE – Zimbabwe is set to introduce a new regime of “special coins” indexed at par with the United States coins by December, the Reserve Bank of Zimbabwe clarified.

John Mangudya

John Mangudya

The coins, which are being imported, will be introduced as a medium of exchange and are aimed at augmenting currencies in circulation especially in change.

The measure comes as Zimbabwe is battling a liquidity crisis and small change challenges.

Reserve Bank of Zimbabwe governor John Mangudya told the Daily News that they were expecting to introduce the special coins before the end of December 2014.

“Indeed, they would be convertible just like the notes,” Mangudya said.

He said “it stood to reason that we need the special coins to be the divisibility units of the USD notes, as such, the special coins would need to be at par with the US cents.”

“Divisibility is one of the most important characteristic of money. The rand coins are also being imported to augment the available stocks within the economy,” said the central bank boss said.

He was tight-lipped on the features of the coins, source and name.

“I cannot tell you the source of the coins,” he said.

“I need to protect the integrity of this market. The RBZ will only share the information on cost once we receive the final invoice from the suppliers, whom we expect to meet next month.”

In his monetary policy statement announced on Monday, Mangudya said the “special coins” denominations will range from one cent to 50 cents.

“Rand coins of 10c, 20c, 50c, R1,R2 and R5 are also being imported to buttress the multiple currency system which is dominated by US$ and Rands,” he said.

The central bank chief added the coins would be distributed to business through normal banking channels from the Reserve Bank.

“The Bank through its Bank Use Promotion Unit shall monitor that the coins are utilised as change to bring decency in the economy,” he said.

Economic experts say the assurance by the RBZ governor will assist in instilling investor confidence in the economy as well as strengthening the financial services sector.

Tony Hawkins, a renowned University of Zimbabwe business academic, said the use of local coins was intended to reduce transaction costs and make it easier for retailers and consumers to conduct business.

He said the use of local coins within a single currency area was not uncommon.

“Members of the SA rand area issue local coins despite being pegged to the rand,” Hawkins said, adding that “it has been stated repeatedly by the Finance minister (Patrick Chinamasa) and this week by the governor, that there are no plans to bring back a local currency.”

Zimbabwe ditched its local currency in 2009 after it was rendered worthless by hyperinflation. Government consequently adopted more stable currencies including the US dollar as well as the South African rand and Botswana pula among others.

Last week, the Bankers Association of Zimbabwe (Baz) said it was imperative for government to retain the multi-currency regime to maintain price stability as well as to strengthen the banking sector for overall economic growth. Daily News

  • Shaka Mambo

    This is the first step in the reintroduction of the Zimbabwe currency as these would only be legal tender in Zimbabwe and regulated by the RBZ. The said intention is good but it is really not a priority for the RBZ as other monetary issues such as capitalisation are more important and required right now. These coins will be open to abuse by the RBZ in the same way Gono abused the Zim dollars until they not only became worthless but laughing stock. The RBZ could potentially have excess amount of these coins minted and use them to symbolise equivalent US dollar amounts which may not be existent and use that to pay civil servants salaries or for government services. The US$ will then start to become very sought after and we all know how Gono dealt with such a scenario. The only way these coins will be useful is to have their introduction as Zimbabwean coins and not special coins( what a nonsensical term), and have pieces of legislation regulating the printing and minting of money then Zimbabwe can introduce a Zim dollar or Zim Dyke(Great Dyke) currency whatever they want to call it. The only reason why Zimbabwe is stuck with the US$ but not having the cent coins to go with it is all because of the problems of currency regulation which was evidenced by Gono’s idiotic actions of going on a wild cash printing frenzy. There has to be legislation governing how money in circulation is managed and the RBZ should seek approval from parliament before offloading any money into circulation. Any money introduced should reflect the country’s earnings from exports and excise duties.

  • http://www.zanupfcrime.com Cde Nikuv Riggington

    We told you the Zimkwacha is comming back mukati tinopenga. Now they r doing it thru the back door. Within 3 months those coins will be worthless as RBZ uses them to flood the market and loot our hard earned US $

  • Tonderai

    Glad they are bringing back the Zim dollar coins but the coins weigh more than the paper. Hope they will make R200 or $20 coins and R1000 or $100 coins also and it will be good to see our name on our own money again. We can start circulating Chinese coins as well as we are an international economy supported by global currencies and coins. We can prepare to print our Zimbabwe dollars again because the coins will be a success.

  • Rumbidzaishe

    We have investigated your the idea and are convinced it is an excellent one.

    We are pleased to report that we did order the coins and they were delivered to the RBZ. We then handed out the coins to members of the Women’s League for their election of officers meeting.

    Unfortunately, we are sorry to report that we have been unable to find the coins and they seem to have disappeared.

    We are proposing to use soda bottle caps as coins until we can fundraise to have another shipment of special metal pieces we will label are real Rands and dollars.

    In other news, Dr. GraceMugabe is expected to launch her new “Rent-an-Orphan” program and harness the energy and money to be gained from child labour in our fields and gem mines. Details forthcoming in the 11 a.m.bulletin