Mthuli Ncube says something nasty will happen If Zimbabwe fully dollarises

Finance and Economic Development Minister, Mthuli Ncube, said that it would be economically suicidal if Zimbabwe adopts the United States dollar as the only currency.

Ncube argued that full dollarisation will result in the destruction of the banking sector and local industry will no longer be competitive, among other other things.

“Four things as a minimum will happen. You will wipe out the entire banking sector, because you need to convert their Zimbabwe dollar balances into US dollars, banks will have negative balances. You will have a crisis; you will have no banking sector.

“Secondly, very quickly you will have a cash crisis because you cannot print US dollars and there will be a divisibility problem; the small denomination notes will be in short supply and you will start to have cash queues in the banking sector.

“The advantage of having a domestic currency circulating with the US dollar is we will have to manage the cash crisis. We have been through this before,” he said.