Govt ponders joining RMU

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The government is expected to reach a conclusion whether or not to join the rand monetary union (RMU) or to continue with the multi-currency system, a Cabinet minister has said.

If the government decides to join the RMU, the South African rand would become the official currency.

Current member states of the union include Lesotho, South Africa, Swaziland and Namibia.

Speaking at a function at a Confederation of Zimbabwe Industries breakfast meeting on Wednesday this week, Industry and Commerce minister, Welshman Ncube said the Finance ministry was still investigating the union and would thereafter compile a report.

“The Ministry of Finance will present the options that we have as a country before the end of the year,” said Ncube.

The country adopted a multicurrency system in 2009, resulting in the use of a cocktail of currencies including the rand, pula, United States dollar and British pound as legal tender.

The issue of Zimbabwe joining the RMU has attracted a lot of attention among economists and policymakers in the country and has been received with mixed feelings.

The attraction of joining the monetary union is supported by the belief that doing so would result in lower transaction costs associated with trading goods and services between countries that use different currencies.

Sadc region countries are following what other European countries did in 2002, forming a European Monetary Union.

The European Union has 27 countries and they use the euro as the local currency. Sadc, Common Market for East and Southern Africa and the East African community are in talks to set up a single monetary union and a free trade area by 2016.