According to reports in the state-owned Herald newspaper, the governor of the Reserve Bank of Zimbabwe, John P. Mangudya insists that there will be no going back on de-dollarisation. According to the governor the country is well on its de-dollarisation path. One wonders whether as Zimbabweans should laugh or cry at this assertion. What de-dollarisation is he talking about?

Even the Herald seems to be incredulous:

Despite allowing some transactions to be in foreign currency,  Government insists de-dollarisation is on course, although the market has seen increased use of the United States dollar.

A fortnight ago Government said everyone providing goods or services in Zimbabwe must now quote prices in both Zimbabwe dollars and US dollars, but using the standard exchange rate set each week as the weighted average in the Tuesday weekly foreign currency auctions.

The legal instrument giving effect to this was gazetted on July 24, 2020 by President Mnangagwa, as an addition to the Exchange Control (Exclusive Use of Zimbabwe Dollar for Domestic Transactions) Regulations.

The statement that the situation we are in right now is part of the RBZ’s deliberate de-dollarisation strategy is not only false, it is laughable. There is nothing deliberate about this as a pile-heap of contractidory Statutory Instruments over the past two years show. We simply stumbled into the current position and there is no grand plan. Stakeholders such as the CZI are therefore worried:

CZI also noted widespread use of the US dollar for transactions in the informal sector, fuel sector, payment of wages and salaries by private sector, pricing by large supermarkets and provision of most private medical and educational services

The CZI and other stakeholders took note of the fact that even the government seems to want to charge in foreign currency as opposed to the Zimbabwean dollar. The result is that demand for the local dollar has been rather weak. They want the government to charge for services in the Zimbabwean dollar as they surmise this will force those with USD to offload it so they can settle internal debts.

The government is probably not going to agree to this request. Not least because the whole de-dollarisation talk is nonsense but because they would never raise much foreign currency this way. People and businesses will continue to hold onto free funds as long as possible and only offload what they want to use in the moment.

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