By Rudo Saungweme

The Ministry of Finance and Economic Development has come up with a document indicating the progress on the Transitional Stabilisation Program (TSP) Reforms dated 9 October 2019.

This document comes at a time when Government detractors are uttering derogatory statements that there is nothing being done by the New Government.

According to the document which encompasses monetary policy restoration, liberalisation of the foreign exchange market reforms among others, the implementation of these reforms is on course

The Minister of Finance Professor Mthuli Ncube highlighted in the document that the transition from the multiple currency to mono-currency was as a result of compromised competitiveness of local companies by the US$.

“The multiple currency regime served its purpose in stabilising the economy through dampening inflation. However, the monetary system lacked flexible utilisation of a full set of monetary instruments to influence economic activity.

“In addition, the adoption of a hard and strong currency such as the US dollars, compromised competitiveness of local companies.

“It is with this view that Government took a deliberate gradual approach for transiting from the multiple currency system to mono-currency,” states the document.

The document indicated the steps that were taken by the Government in doing away with the multicurrency system.

These includes, the separation of the foreign Nostro accounts from RTGS denominated accounts, establishment of the RTGS dollar comprising of electronic balances in banks and mobile platforms, bond notes and coins and the introduction of the Zimbabwe dollar on 24 June 2019.

The document also states that bond notes and coins remain the sole legal tender and the foreign currency will be served as reserve currencies.

On the introduction of the Zimbabwe dollar on 24 June 2019 the document states that, “Under the new framework, all domestic transactions are now settled in Zimbabwe dollars, the sole legal tender represented by bond notes and coins and electronic currency, that is, RTGS dollars.

“All other currencies from the multi-currency regime serve as reserve currencies,” it stated.

The Minister of Finance abolished the multi-currency regime in June this year, indicating that the market was choosing to price a number of goods and services in US dollars when the majority of citizens earned the local currency. It was also done to give the Reserve Bank of Zimbabwe (RBZ) full monetary policy to defend the value of the domestic currency.