Zim puts rand on table again
Jul 07 2009 14:27
Leani Wessels
Johannesburg - The Zimbabwean government put the adoption of the rand back on to the table with the country's industry and commerce minister saying the option would be debated.
Welshman Ncube, industry and commerce minister, was quoted by Reuters to have said on Tuesday that the country could not "... re-enter the Zimbabwe dollar without the economy to support that".
"We need another solution. We cannot continue forever with multiple currencies," Ncube said. He was addressing an Africa forum in Zimbabwe.
"If we can at least join rand monetary union, we will have money allocated to Zimbabwe through that system," he said.
The Zimbabwean dollar was abandoned at the beginning of the year, when runaway inflation and a thriving black market rendered the dollar virtually useless. The issue of Zimbabwe using the rand as its bespoke currency hit the news at the turn of the year but after several weeks of speculation the matter was ditched.
Dawie Roodt, an analyst at Efficient Group said Zimbabwe does not have the means to peg its currency to the rand. "Whether they do it with or without the South African government?s permission, they need large currency reserves to enact such a plan, which don't exist," he said.
According to Roodt, Zimbabwe needs to focus on rebuilding its institutions to ensure a proper democracy, before any real improvement in the economy will be seen.
"No decision has been made, we will debate it and see what the best alternative is," said Ncube.
Countries like Namibia and Lesotho fix the relative values of their currencies to the rand.
- Fin24.com
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