Zim mulls fixing dollar to rand

Johannesburg - Zimbabwe will consider fixing its local dollar to the South African rand but will not adopt it as its main currency, President Robert Mugabe said in an interview published on Thursday.

"I do not see us adopting the rand as our main currency. Even in Sacu, the South African Customs Union, the members have their own currencies even though they use the rand," Mugabe told Harare-based The Herald Online.

"Botswana has its pula, Namibia has its dollar, Lesotho, Swaziland, they all have their own currencies. But they base them on the rand and that is something that we might consider doing here."

Mugabe said "at the moment we are using all international currencies".

"When it was first mooted, the idea of paying people in US dollars, I was against it and I still am because we just do not have enough [foreign currency]. It is a problem that confronts us even now.

"Personally, I think we should revalue the Zimbabwe dollar in a manner that fixes its relationship with the rand for a while. We will protect it for a while, for a while as we increase production. But we should protect it."

Mugabe said some Zimbabweans have started to speculate with the Zimbabwean dollar.

"The problem is that the people of Zimbabwe have become speculators. There are some people who, if you say the [Zimbabwe] dollar is four to one with the rand, they will immediately make it eight to one and 10 to one.

"So there is this escalation on a daily basis. We should fix it [the value of the local currency] legally and keep it there for now. I want to discuss this with [Finance Minister Tendai] Biti.

"And how do you make it go? Through production in agriculture, manufacturing, mining and the people get goods and services and then we can expose it to the fluctuations of the market," said Mugabe.

- Sapa