'Rand fall likely to benefit Zimbabwe economy'

Economic analysts say the fall of the rand against the United States dollar is likely to benefit the economy in the form of stable pricing models.

There is a general feeling in some quarters of the economy that the 2,25 percent decline of the rand against the US dollar will bring import benefits that will translate to stable pricing systems as buying from South Africa will become a little expensive due to a stronger US currency.

Zimbabwe uses a basket of currencies that include the US dollar, Botswana pula, South African rand, British pound and the euro.

However, the green back is the predominant currency used in several transactions.

An economic expert Zex Murerwa says since South Africa is Zimbabwe's major trading partner, accounting for more than 65 percent of exports, the decline in the value of the rand against the US dollar will benefit the economy.

"We are likely to foresee the increase in the purchasing power parity and this will be of great benefit to local industry," said Mr Murerwa.

Another economic commentator Davison Gomo says while the economy is likely to benefit in the form of low import costs, there is need for industry to reduce the dependency syndrome by increasing exports.

"We need a rise in import volumes to sustain the economy," Dr Gomo said.

Official information shows that the rand has in the past several weeks dropped in value against the US dollar from an average of R9,110 to almost  R8,95 due to dismal economic outlook data for South Africa.