HARARE: Commercial banks in Zimbabwe have so far converted US$4.0 million worth of old Zimbabwean dollar notes under the government’s demonetisation programme which commenced on June 15 this year, the latest figures show.
Under the programme, whose aim is to remove the Zimbabwean dollar currency from circulation and which will run till Sept 20, the government has set aside a budget of US$20 million to redeem the old local currency which ceased to be legal tender when the country adopted the use of multi-currencies in 2009 to tame runaway inflation which had ravaged the value of the Zimbabwean dollar to an infinitesimal level.
Under the demonetisation programme, which is an exchange process, a rate of one US dollar to 35 quadrillion Zimbabwean dollar for bank balances and one US dollar to 25 trillion Zimbabwean dollar for walk-in customers is being used.
Zimbabwe dollar notes that are being accepted for exchange under the programme are those issued in 2008 and 2009.
“The policy objective (of the demonetisation programme) is to promote consumer and business confidence by providing credibility to the multiple currency system and legally retiring the local unit,” the Reserve Bank of Zimbabwe (RBZ) says.
Figures released by the central bank show that a total of US$301,000 had been paid out to walk-in customers at various financial institutions.
“The Bank is satisfied with how the demonetization program has progressed so far,” the RBZ said, adding that Zimpost, the operator of the national postal services, which has also been roped in in the programme, had assisted by undertaking cash exchanges in rural area that have no banking facilities nearby.
“Notably, frantic efforts are being made by the Bank to deal with customers of closed banks and is liaising with the Deposit Protection Corporation in this regard,” the RBZ said.
A number of banks have closed in the last six years due to a litany of challenges fuelled by absence of good governance and capitalisation constraints.
