Zimbabwe FM Biti: Next Monetary Move Likely to Be Rand Adoption

By Blessing Zulu Washington
19 August 2009
One day after Reserve Bank of Zimbabwe Governor Gideon Gono urged the reintroduction of the sidelined Zimbabwe dollar, Finance Minister Tendai Biti told Parliament that the country’s next monetary move is more likely to be the adoption of the South African rand.
The Zimbabwe dollar was abandoned in April but has remained in use to make change for bus fares owing to a scarcity of small-denomination U.S. dollar, rand and other bills.
Some informal traders also make change in Zimbabwe dollars. In such uses the going rate of exchange is 3 trillion Zimbabwe dollars to 50 U.S. cents, local sources said.
Biti told the House Committee on Budget Finance and Investment Promotion Tuesday that the advice of monetary experts will be sought on the advantages or drawbacks of joining the South African rand union which includes Namibia, Lesotho and Swaziland.
Biti said the Zimbabwe dollar was unlikely to come back soon, adding that even if it did it would probably have to be pegged to the rand.
Gono proposed reintroducing the local dollar by backing it with gold reserves, saying adopting the rand would entail too many legal complications.
Economist Luxon Zembe, a former president of the Zimbabwe Chamber of Commerce, told reporter Blessing Zulu of VOA's Studio 7 for Zimbabwe that the country would be best served by adopting the rand as its monetary unit.
Economists and political analysts said the currency debate is likely to cause more friction in Zimbabwe's fractious national unity government. President Robert Mugabe has said he would like to see the Zimbabwean dollar back in full circulation.
Reached by VOA, former finance ministers Herbert Murerwa and Samuel Mumbengegwi declined to comment.
But Simba Makoni, a former finance minister, presidential candidate and leader of the newly formed Mavambo or Dawn party, told VOA that so-called randization is the best way forward as the use of multiple hard currencies is complicating life for ordinary Zimbabweans.