Home » Business » ZIMBABWE’S CENTRAL BANK TAKES SOFT APPROACH TO BOOST ACCEPTANCE OF NEW COINS

HARARE, Feb 5 — The Reserve Band of Zimbabwe (RBZ) says although it has the power to force stakeholders to accept bond coins it will not take that route given past experiences which the public has with the local currency.

RBZ Governor Dr John Mangudya says that instead of using force, the central bank will use moral suasion to ensure stakeholders appreciate the economic benefit of using the medium of exchange.

Bond coins, whose value is placed at par with United States dollar coins, were introduced on Dec 18 last year to assist alleviate problems with a lack of small change which the economy has grappled with since the government moved using multiple foreign currencies, mainly the US dollar, in 2009 after runaway inflation in the billions of percentage points rendered the local currency unusable.

The bond coins, which are in denominations of one, five, 10 and 25 cents, are slowly being accepted in the market with major retailers and other firms in the economy such as mobile telecommunications firm, Econet endorsing them. However, some members of the public, especially vendors and public transport operators, still refuse to accept the coins.

“We can come up with measures to force them to use them but we do not want to,” said Dr Mangudya at a recent meeting with editors. “People had a bad experience with the Zimbabwe dollar. We want to use moral suasion so that people see the value of bond coins.”

Dr Mangudya is due to meet with stakeholders in the country’s second largest city, Bulawayo, to talk about the bond coins and address any concerns that they have. The central bank head says it is critical for people to realize that the coins, which are backed by a 50 million USD Afreximbank bond, do not lose value compared with the South African coins which most consumers are accustomed to.

Dr Mangudya says some retailers who were not accepting the coins, which are minted in South Africa, are doing so for selfish reasons to force consumers to accept other goods such as sweets in lieu of change.
“It is actually consumers who must help us by demanding their change,” the central bank governor says.

“Consumer rights are trampled upon in Zimbabwe,” he says, adding that bankers have failed to bring in coins directly from the United States as it is expensive to import them.

SOURCE: NEW ZIANA

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