HARARE, June 11 (The Source) – Zimbabwe’s central bank says it will next week start to compensate depositors who lost their savings and pensions when the country adopted the multiple foreign currencies in 2009 to replace the collapsed local unit.
The Zimdollar will be phased out through demonetisation, a process to remove the legal status of a currency unit whenever there is a change of national currency.
The country adopted a basket of currencies in 2009 which mainly includes the United States dollar and the South African rand, but the local unit was never legally retired.
“We need to safeguard the integrity of the multiple currency system or dollarization in Zimbabwe. Demonetisation is therefore critical for policy consistency and for enhancing consumer and business confidence,” Reserve Bank governor John Mangudya said in a statement on Thursday.
He said the demonetisation process will run from June 15 to September 30 and will deal with all non-loan bank accounts as at December 31, 2008 as well as cash held by the public.
Mangudya said all cash pay-outs under the demonetisation process shall be exempted from bank charges and government tax, and would be disbursed on a “no questions” asked basis.
Accounts with balances of zero to Z$175 quadrillion will be paid a flat $5 while those with balances above Z$175 quadrillion will be paid the equivalent value after applying the United Nations exchange rate of USD1/Z$35 quadrillion.