Divisions have rocked the regime of Robert Mugabe after the dictator rejected an offer from South African president Jacob Zuma for Zimbabwe to adopt the rand as a transitional currency, it emerged.
Senior regime figures are now at the forefront of spiriting hard currency – United States dollars, Euros and British pound – out of the country in anticipation of the re-introduction of the Zimdollar, abandoned several years ago when it became worthless due to hyperinflation.
Moderates in the regime, such as tourism minister Walter Mzembi are pushing for the adoption of the rand while hardliners want the masses to be fed on home-made ‘bond notes’ which the central bank governor John Mangudya promised to pump into the market by July 2016. The ‘chefs’ will still be able to exchange the bond notes for hard currency if they run businesses or want to travel abroad, but for the masses, the currency gap is expected to soon deteriorate into a financial sinkhole.
Commentators say the introduction of bond notes is a measure to mop up all the hard currency which the public have. Banks have been instructed to keep all the hard currency they get and forward it to the central reserve while pumping out the precariously supported bond paper.
Mzembi says it was a mistake for Mugabe and his associates to reject the offer of the rand.
“I said it before, still insist there is a broader macroeconomic and fiscal imperatives for broader use and application of the Rand where we are with US $ today. It has largely achieved macroeconomic stabilisation for Zimbabwe but it will not rescue us out of stunted growth nor deflation,” Mzembi said.
Other cabinet ministers and senior Zanu PF politburo members have resisted moves to introduce the rand. They want U.S. dollars which are easier to move out of the country.
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