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No to Chinese yuan

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ZIMBABWEANS have opposed the use of the Chinese yuan under the prevailing multi-currency regime, a snap survey carried out by NewsDay has shown.

By Business Reporter

Responding to questions on the paper’s online platforms ahead of the National Budget slated for next month, many NewsDay readers were against plans by the government to use the official currency of the world’s second largest economy, despite growing bilateral trade with Zimbabwe.

More than 100 users responded to the pre-Budget questions.

“No to yuan,” was a common response from social media users.

“No yuan! Why look east yet the East is looking west?” The use of the yuan, according to some social media users, was a form of “colonisation”.

The Reserve Bank of Zimbabwe last year ignited debate over the country’s future currency following a liquidity crunch on the domestic market that almost paralysed business.

“As a country, we still have the opportunity to avoid being caught napping by adopting the Chinese yuan as part of consolidating the country’s Look East policy,” said Gono last year.

In July, members of the Confederation of Zimbabwe Industries converging in Nyanga opposed use of the yuan.

Zimbabwe adopted multiple currencies in 2009 in a bid to stem runaway inflation.

In its paper on currency reforms in Zimbabwe, the African Capacity Building Foundation in 2010 said before adopting any new regimes,  it was important to assess the extent to which they addressed problems that led to the demonetisation of the Zimbabwe dollar in the first place.

“In particular, the restoration of the functionality of the Reserve Bank requires currency reforms that do not reignite hyperinflationary pressures. The hyperinflation itself created credibility challenges that need to be overcome before the full restoration of its supervisory and regulatory functions related to the money supply process,” reads the report in part.

“Some of the shortcomings of the monetary currency regimes can be addressed by a number of currency regime options that include full dollarisation, randisation, joining the Rand Monetary Union with or without the Zimbabwe dollar, or reintroducing the Zimbabwe dollar with a fixed or flexible exchange rate.”

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