Zimbabwe not yet ready to have its own currency, says Gono

RBZ governor Gideon Gono says Zimbabwe is not yet ready to have its own currency adding the country had to first address its burgeoning trade deficit.

Gono said Zimbabwe remained heavily-dependent on the prevailing multi-currency system, dominated by the US$. There are worries that a President Mugabe led government might "prematurely" revert to the Zimdollar, if the leader wins the looming election.

Turning to the financial sector, Gono said the banking sector was sound with the deposit base projected to grow.

However, during Zanu PF's annual congress, which was held in December last year, delegates resolved to reintroduce the redundant Zimbabwe dollar (Zimdollar) to run alongside the multi-currency regime in order to resolve the liquidity challenges besetting the country.

According to a list of resolutions passed at the 13th Zanu-PF national people's conference that was held four months ago, the party said it would lobby for the reintroduction of the valueless Zimdollar, arguing the current liquidity crunch was exacerbated by lack of a local currency.

"The party would instruct the government to work out modalities for the reintroduction of domestic currency alongside the multi-currency system in order to address the current liquidity crisis and to enable our people to carry out their transactions," the resolution read in part.

Dr Gono, who seems to have had second throughts, recently made a complete U-turn over the Zimdollar issue. Speaking on Zanu-PF's recommendation for bringing back the Zimdollar in December last year, Dr Gono said the introduction of a reconstituted Zimbabwe dollar  alongside the Chinese Yuan and other existing currencies is feasible and beneficial to the economy.

"The form and manner as well as the resumption of the proposed new Zimbabwe dollar or whatever it will be called will obviously take into account our national reserves in terms of strategic and precious metals such as gold reserves for back up," he said.

Meanwhile, Gono expressed concern over Zimbabwe's over reliance on imports, saying the development was depleting the country's foreign currency base.

He said the capacity of local investment should be strengthened and the unnecessary outflow of foreign currency must be stopped.
Gono said he had no problem with the importation of machinery, raw materials, but it was the importation of finished goods which they were worried about.

Turning to the financial sector, Gono said the banking sector was sound with the deposit base projected to grow.