Zimbabwe experiencing an economic mess-RBZ deputy governor says

Zimbabwe's central bank deputy governor Kupukile Mlambo has said the country is in a deep economic mess and flatly denied advocating for the adoption  of the South African rand as the main currency.

Late March, Mlambo was widely quoted in the media saying  adoption of the South African Rand would benefit the country, presently battling an acute cash crisis and help alleviate cash shortages.

Mlambo pointed out that the central bank would prefer for the South African currency to be Zimbabwe's dominant currency, following hints by President Robert Mugabe in a recent interview that the country needed to adopt the rand.

"We will be happy in the central bank if people use the rand more than they would use the other currencies in the basket.

" But because people only store value, they prefer to use the dollar — that's where the challenge is," Mlambo told delegates at a Confederation of Zimbabwe Retailers bond note review meeting in  Harare.

 However, that was seen as a push towards adopting the rand, he said today.

 Addressing guests at the international business conference at the Zimbabwe International Trade Fair in Bulawayo today, Mlambo said he was misquoted.

He said using the rand is not the solution because of stock value and the only way the country could "get out of this mess, not mess sorry this challenge is that we need to increase production in the factories"

"What i said in that meeting was we need to use more of the rand within the (foreign currency) basket.

"Using and adopting are very different in the way i did English, very different because adopt is a major policy decision.

"Why am saying we should use the ran more is that the rand is useful for transaction purposes as is the bond note that you have all embraced.

"But the rand is difficult as a store of value and that is where the challenge is for many Zimbabweans in relation with the US $. The rand fluctuates.

"As the central bank i cannot say adopt the rand because i would need to change the value of all US$ assets today and that is a nightmare.

The adoption of the rand is not the solution" said Mlambo.

Following adoption of the multi-currency system back in 2009 — after the local currency hit the skids in 2008, leaving the country vulnerable to hyperinflation that peaked 231 million percent, US Dollar (US$)  dominated Zimbabwe which witnessed an escalation of cash shortages.

Various business quarters have been lobbying government to formally adopt South Africa's currency as the country's formal trading exchange; however, the central bank and Treasury have been against the stance.