$5 Compensation For Zim Dollar Accounts

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HARARE – The government has set aside $20 million towards the demonetisation of long dead Zimdollar accounts, with a maximum once-off payment of a paltry $5 per each account holder.

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said in his monetary policy statement yesterday that the then prevailing United Nations (UN) exchange rate would be used to convert Zimdollar balances held by local banks.

“In line with the policy pronouncement made by the minister of Finance and Economic Development in both the 2014 Budget statement and the mid-term budget statement, the Reserve Bank shall be demonetising the Z$ balances by 30 June 2015.

“All genuine or normal bank accounts, other than loan accounts, as at 31 December 2008 would be paid an equal flat amount of US$5 per account.

“The then prevailing United Nations (UN) exchange rate would be used to convert Z$ balances that were as a result of arbitrage opportunities ‘burning’ and for Z$ cash to be received from the walk-in banking public,” Mangudya said.

He said the move would bring finality to the use of the Zimdollar as the country’s official currency, as well as concerns over balances denoted by it.

“The Reserve Bank shall soon publicise the modus operandi of the demonetisation process.

“The significance of this policy measure is to bring to finality this long outstanding government obligation to the banking public and to formally pronounce the demise of the local currency.

“This is critical to buttress government’s commitment to the multiple currency system which government is committed to preserve up until the following economic fundamentals have reached acceptable and sustainable levels,” he said.

Zimbabwe switched to a multi-currency system in 2009 after hyperinflation rendered the Zim dollar worthless.

According to the RBZ, 80 percent of the transactions in the country are made using the US dollar.

The adoption of multiple currencies helped Zimbabwe stem hyperinflation which officially scaled 231 million percent in 2008.

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