Demonetisation complete

THE Reserve Bank of Zimbabwe (RBZ) says the exercise to decommission the local unit has been completed and less than half of the $20 million kitty set aside has been used.


In June, RBZ said the Zimbabwean dollar would be retired from the formal system to build confidence in the multicurrency regime that has been in use since 2009.

The presence of the local unit in the system had led to speculation that it would be retrieved.

“The process is complete and it was completed with $9m, we had over budgeted for the process. The banks will be bringing back the surplus,”RBZ governor John Mangudya said.

John Mangudya
John Mangudya

The demonetisation process—an act of stripping a currency unit of its status as legal tender—began in June and $20m was disbursed to banks and the post offices countrywide, for depositors to take money as part of closing down the Zimbabwe Dollar transactions.

Under the demonetisation process, bank account holders with balances of up to Z$175 quadrillion were paid a flat $5.

Account holders with balances above Z$175 quadrillion were paid the equivalent value after applying the UN exchange rate of $1 per Z$35 quadrillion or $1:Z$35 000 (revalued).

The process according to Mangudya was not meant to address the ill caused by inflation or hyperinflation.

“It is about decommissioning currency. I do appreciate the loss caused on all citizens by hyperinflation, but unfortunately hyperinflation cannot be compensated throughout the whole world,” he said.

He said the demonetisation process was to bring finality to the outstanding obligation by the government to the banking public and to formally announce the demise of the local currency.

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