By John Kachembere
HARARE – Reserve Bank of Zimbabwe governor John Mangudya says a social media message urging Zimbabweans to withdraw all their money in banks before 2016 should be dismissed with the contempt it deserves as it is meant to cause panic and despondency in the economy.
“We don’t know the intention of people who are circulating these messages, but I want to assure the nation that the multi-currency system is here to stay and we have no intention to exchange depositors’ funds,” Mangudya told the Daily News yesterday.
This comes after Zimbabweans were over the weekend bombarded with social media messages which “warned” local citizens to keep their money away from banks for fear of the foreign currency accounts being replaced with the Chinese yuan. This was after Zimbabwe last week announced that it will begin using the yuan as one of the currencies in the country.
“All caring Zimbabweans should go to the bank early Monday , 29th and withdraw everything in their bank accounts or transfer to some US dollar dominated investment accounts or savings accounts before the so-called yuan flood the banks,” read part of the message whose origin is yet to be established.
“The Zanu PF government wants to convert everything in USD (in your accounts) to the useless yuan after which they will use the USD to pay army general. Please take this seriously and spread the news. Don’t say we didn’t warn you,” added the message.
However, Mangudya said people who originate such messages should be charged with “sabotage” as their actions are tantamount to destroying the economy. He added that the country had no appetite to re-introduce the local currency or do away with the multiple currency system until economic conditions improve.
“This is not the first time that such messages have been circulated and Zimbabweans by now should know better and not be fooled. We have nine currencies that we are currently using and we’ll be using them into the foreseeable future until production has increased in the country,” he said.
Zimbabwe abandoned its own currency in 2009 post the hyperinflation period which had reached as high as 500 billion percent, causing its currency to be unusable.
The country then started using a number of foreign currencies, including the United States dollar and the South African rand. The yuan was only added later.
The Chinese currency has been a legal tender in the country’s multi-currency system for two years now. However, its use had not been approved yet until recently for public transactions in the market.
Economic experts say Zimbabwe’s decision comes at a time when it is battling to revive a sinking economy.
Finance minister Patrick Chinamasa recently slashed the country’s economic growth forecast by 1,5 percent this year – in line with the International Monetary Fund forecast – from an initial growth target of 3,2 percent.
However, given the severe electricity shortages, collapse in commodity prices, drought as well as political uncertainty, economists believe such a growth target is highly ambitious.
Zimbabwe turned to China at the turn of the millennium after its western trading partners isolated it over Harare’s human rights record. China eventually became Zimbabwe’s biggest trading partner. Apart from being Zimbabwe’s biggest trading partner, China is also the largest investor in Zimbabwe, which is struggling to emerge from a deep 1999-2008 recession.
Chinese president Xi Jinping presided over the signing of various agreements to upgrade and rebuild Zimbabwe’s infrastructure, when he visited Zimbabwe in early December.
At least 10 economic agreements were signed during Jinping’s visit, of which a $1 billion loan to expand Zimbabwe’s largest thermal power plant was the most significant one.
The southern African country has received more than $1 billion in low-interest loans from China over the past few years. Daily News