US govt agrees to supply coins to Zimbabwe

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2011 February 22 09:54:42 | 886 Views

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FORGET change problems, getting a token or a sweet as change and being stuck with greasy soiled notes. This is because the United States Federal Reserve has agreed to supply coins and replace soiled notes to Zimbabwean banks in a bid to end change problems in the economy, businessdigest has established.

According to sources, representatives Bankers Association of Zimbabwe led by its president and FBC Bank boss John Mushayavanhu met Finance minister Tendai Biti last week to map a way forward in dealing with change problems in the economy.

The sources, said the US Federal Reserve have “formally” agreed that Zimbabwe’s economy is now dollarised and will now supply Zimbabwe with coins and replace notes.

Officials from the Finance ministry will soon depart for the US to airlift the coins to Zimbabwe, the source said.

Banks and government, according to the sources have agreed to charter an Air Zimbabwe flight to pick up the coins in the US. The flight costs will be met by both government and banks.

Zimbabwe has been saddled with change problems since the introduction of multi-currencies in February 2009.

Retailers are offering consumers credit notes, tokens and even sweets to settle small change.

Mushavanhu on Wednesday declined to comment on the matter referring all questions to Biti who was unreachable at the time of going to press.

In his 2011 budget statement, Biti said government had engaged the United States Federal Reserve over possible provision of coins and replacement of soiled notes to ease small change problems in the country.

Biti said: “I am pleased to advise on the fruitful interactions with the US Department of the Treasury which stands ready to facilitate access to acquisition of smaller denominated coins and replacement of soiled notes through the US Federal Reserve and commercial banks. I will, therefore, be finalising on this in conjunction with the banking system, that way resolving the matter of challenges with change and coins.”

“The availability of both US dollar and rand coins will do away with the challenges posed by the current need to apply cross rates in giving change in rand coins for transactions undertaken in US dollars,” Biti said. “Whilst this problem should be alleviated by electronic payment systems, the large size of the informal sector and the lack of infrastructure for electronic payment systems in rural areas necessitate the availability of large volumes of small denominations”.

Source: ZimInd