Zimbabwe won't adopt rand

THE Reserve Bank of Zimbabwe (RBZ) has put paid to speculation that Zimbabwe could adopt the South African rand despite the challenges in utilising the multicurrency system that is dominated by the United States dollar.

Some local economic observers have suggested that Zimbabwe could benefit from joining the rand monetary union in so far as South Africa is already Zimbabwe's major trading partner, accounting for around 60 percent of the latter's imports.

The union comprises South Africa, Lesotho, Swaziland and Namibia. These analysts also say adopting the weaker rand (compared to the US dollar) will help local industries reduce their costs of production.

RBZ deputy governor Dr Kupukile Mlambo, however, said yesterday that there are significant technicalities that need to be overcome for adoption of the rand to become a distinct possibility.

Zimbabwean authorities have already said return of the Zimbabwean dollar will not happen anytime soon the macro-economic fundamentals are not right.

Dr Nebson Mupunga, a principal director in the central bank's External Sector Economic Research Division weighed in and said the real challenge that Zimbabwe currently faces is not one of currency, but production.