Monetary policy fuels economic strife: Business

The fiscal and monetary measures announced on Monday will likely increase the cost of business and cause labour unrest, as workers seek higher wages to cushion themselves against the rising cost of living, business leaders said, while the opposition warned the drastic measures would further ruin the economy.

Finance minister Mthuli Ncube and Reserve Bank of Zimbabwe governor John Mangudya on Monday announced a raft of measures that will see, from October 15, banks allowing depositors to hold separate accounts for United States dollars for the first time since January 2009 when the country adopted the US dollar.

The move by the authorities is an admission that the money Zimbabweans have in their accounts is a virtual local currency that will trade in electronic transfers and bond notes.

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