Moves to bring Zimdollar back

Zanu PF has started pushing for the re-introduction of the Zimbabwe dollar to be used alongside multiple foreign currencies as a way of tackling the liquidity problems afflicting the economy.

This was one of the resolutions adopted at the just-ended Zanu PF national conference in Bulawayo.

There was rapturous applause from the delegates when Zanu PF secretary for legal affairs Emmerson Mnangagwa announced the resolution on Saturday.

The dollar was suspended in April 2009 following the introduction of the multi-currency system earlier in February of the same year when the local currency was no longer worth the paper it was printed on.

The move virtually took away the money supply management function from the Reserve Bank of Zimbabwe (RBZ) — which had resorted to printing money during the hyper-inflation era to support its numerous quasi-fiscal activities.

Zimbabwe is currently using mostly the United States dollar, South African rand and Botswana pula.

While the problem of galloping inflation has been solved and the country is now experiencing positive economic growth after adoption of the multiple currency system, the economy is haunted by liquidity problems.

Earlier this year, RBZ governor Gideon Gono called for the introduction of a gold-backed Zimbabwe dollar while Vice-President Joice Mujuru recently suggested adoption of the Chinese yuan, which is reportedly firming against the US dollar.

Presenting his $4 billion 2012 National Budget last month, Finance minister Tendai Biti ruled out the reintroduction of the local currency and instead said the multi-currency regime would remain in place until the end of next year.

Biti hinted Zimbabwe could adopt the rand as the official currency once the Sadc region agrees to use of a single currency.

South Africa, Lesotho, Namibia and Swaziland are members of the Southern African Customs Union and the rand is regarded as legal tender in those three countries where it circulates freely.

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