Dump US dollar, adopt Rand, says Zimbabwean bankers

Bankers Association Zimbabwe (BAZ) president Charity Jinya on Monday told a parliamentary committee on finance that it used be wise to adopt the South African rand as major trading currency due to level of trade between the two countries.

South Africa is Zimbabwe's largest trading partner, accounting for about 70 percent of imported goods on the local market. Zimbabwe's exports on the other hand have tailed off due to the strength of the greenback against regional currencies which rendered them more costly.

"It is not sustainable for the US dollar to continue as the major transacting currency so we would recommend that the South African rand be used as the main transacting currency. This would reduce concentration of risk on the US dollar," said Jinya.

"We also recommend that the US dollar be reserved to make off shore payments and local electronic payments that will reduce the amount of US dollars likely to leave the borders of Zimbabwe through unofficial means."

The Reserve Bank of Zimbabwe on May 4 announced the introducion of bond notes to tackle the cash shortages, but the five-month gap between the announcement and their planned October introduction has left banks open to a run on deposits by clients who fear the return of a loathed local currency.