In his monetary policy statement released on Wednesday, RBZ governor John Mangudya said the Reserve Bank would demonetise balances in Zimbabwean dollars by June 30 2015.
“It is envisaged that US$20m shall be used for this purpose,” said Mangudya, adding that all genuine or normal bank accounts other than loan accounts as at December 31 2008 would be paid an equal flat amount of US$5 per account.
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He added that the then prevailing United Nations exchange rate would be used to convert Z$ balances that were a result of arbitrage opportunities.
Mangudya explained the significance of this policy measure is to bring to finality to this long-outstanding government obligation to the banking public, and to formally pronounce the demise of the local currency.
He also said the move was aimed at buttressing government’s commitment to the multiple currency system which it is committed to preserve until economic fundamentals have reached acceptable and sustainable levels.
Analysts however questioned whether the $20m is enough to pay out all the Z$ balances that were trapped in banks.
“Is the RBZ saying Zimbabwe had only $20m worth of deposits in 2008?
“The RBZ itself is saying it has debts from those days amounting to $1.2bn; does it mean it borrowed more than all the money in the banking sector?” asked one analyst on condition of anonymity.