Thursday, June 25, 2009

GNU confirms the Zimbabwean Dollar will not come back

Tuesday, 23 June 2009 - Harare Tribune

Zimbabwe does not plan to revive its local currency because it believes continued use of the U.S. dollar will help revive investor trust, a minister said on Tuesday.

The country is unlikely to move away from the U.S. unit until a regional currency is adopted, Economic Planning and Development Minister Elton Mangoma told a mining conference in London.

"We feel that we need to gain the confidence of the international community and therefore... the Zimbabwe dollar is not coming back," he said.

Zimbabwe has allowed the use of multiple foreign currencies since January to stem hyperinflation which had rocketed to over 230 million percent and left the Zimbabwe dollar almost worthless.

One reason for not returning to the Zimbabwe dollar is because the regional Southern African Development Community (SADC) has pledged to launch its own common currency, he said.

"We are in the SADC region and one of the things that we signed is to go for a unitary currency. That unitary currency, we don't know what it's supposed to be."

Some people have suggested that Zimbabwe adopt the rand currency of its biggest trading partner, South Africa, but Mangoma rejected that idea.

"If we actually say we are going to the rand today, it means we have sold that process of whether the unitary currency is going to be the rand or something else and we just want to keep this something else alive," he said.

"The rand itself has got its own other issues so... at least there is some certainty about how the U.S. dollar is going to behave in the future."