The Government of Zimbabwe has ruled out adopting the United States dollar as the country’s sole official currency, terming it “suicidal,” the state-run Sunday Mail reported, citing Finance Minister Mthuli Ncube.
Minister Mthuli Ncube said such a move could result in foreign currency deficits and deflation for the African nation.
“We cannot adopt the United States dollar alone as the official currency,” Ncube told lawmakers during a pre-budget consultation meeting, according to the state newspaper.
“You were there before and there were queues at banks, huge foreign currency deficits and you had deflation. That was because of the U.S dollar,” he said. “It is not a good idea, and it will be suicidal to do so.”
Local companies have experienced delays in accessing foreign currency at the weekly central bank foreign exchange auction, forcing several to source money on the parallel market. That’s led to a wider spread between the official and parallel market rates over the past two months.
The Zimbabwe dollar officially trades at 93.08 per U.S. dollar, but is readily available at 160 to the dollar on the streets of Harare.