Zimbabwe PM: To talk with S.Africa on use of rand

Thu Feb 19, 2009 7:47pm GMT

By Nelson Banya

HARARE, Feb 19 (Reuters) - Zimbabwe is engaging South Africa over using its neighbour's rand currency to boost foreign exchange liquidity, Prime Minister Morgan Tsvangirai said on Thursday.

South African President Kgalema Motlanthe said earlier this month that Zimbabwe, grappling with inflation of more than 200 million percent which has rendered its currency worthless, could adopt the rand, but he did not give details.

"I don't want to pre-empt this, but we are really engaging the South Africans to make sure we can discuss (using the rand) ... to provide relief," Tsvangirai told business leaders in Harare.

"We are in an emergency situation, a fire-fighting situation. For now we are talking of an emergency plan," he said when asked what Zimbabwe's new unity government was doing to ease an acute foreign currency crunch."

Tsvangirai was due to meet Motlanthe in Cape Town on Friday, accompanied by Zimbabwe's Finance Minister Tendai Biti and Foreign Minister Simbarashe Mumbengegwi, the South African government said.

"The meeting would be in the context of how now to address the issues around the reconstruction of Zimbabwe," foreign affairs director-general, Ayanda Ntsaluba, told a media briefing.

"We will continue to keep an eye with a view of lending whatever support as South Africa."