Exiting dollarisation won't be easy for Zimbabwe, says UN official

A United Nations Development Programme senior economic advisor in Zimbabwe Amarakoon Bandara says no country has ever been able to reintroduce its domestic currency in the history of dollarisation due to the costs associated with such a decision and Zimbabwe may not be able to do so at least in the next five years.

"One of the primary conditions you need to have in place is restoring public confidence in a local currency. Basically, this means you have to eliminate building of inflation expectations," Mr Bandara told delegates.

"These are the indications which show that Zimbabwe is not at the level where it can reintroduce its local currency. It may need to grow the economy, increase revenue inflows and start attracting significant investment first before thinking about the local unit," the UNDP economic advisor said.

He said that Zimbabwe was not ready for reintroduction of local currency, even under a different name as the fundamentals were not there yet.

He said one of the primary conditions that need to have in place is restoring public confidence in a local currency.

Basically, this means you have to eliminate building of inflation expectations.