adminreintroduction of the local currency would only be considered once an enabling environment was created.
Following the announcement of a possible return of the Zimdollar, there has been considerable debate on the feasibility of the plan and The Herald sought clarification from the Governor, whom the President said he was consulting with on the issue.
Some sections of the media and in MDC-T have been using this as a campaign tool against President Mugabe and Zanu-PF by twisting the President’s words to intimate that the Zimbabwe dollar would be re-introduced immediately when in fact, he said it was a project for the future once the economy stabilised.
“As monetary authorities, we advise that as per the announcement by His Excellency President RG Mugabe, the re-introduction of a local currency is rather a medium to long term aspiration than an immediate, near-term agenda item on our radar as the central bank.
“Essentially, it is every country’s desire to have its own currency in order to avail potent policy options to policy makers, and Zimbabwe is no exception in this case. This notwithstanding, the re-introduction of a local currency requires that (certain) preconditions be met, which pre-conditions His Excellency the President clearly outlined on the subject,” said Dr Gono.
These pre-requisites include the attainment of sustained macro-economic stability and re-orienting the economy on a firm recovery trajectory, the accumulation of adequate foreign currency reserve buffers to the Sadc target of at least three months import cover “but in our case His Excellency the President would like to see us at least doubling that threshold”.
Furthermore, the rehabilitation of infrastructure such as roads, water and sanitation, telecommunication and energy, the restoration of confidence in the economy and in the banking sector in particular, would be critical before the local currency is introduced. Dr Gono said these pre-conditions will be attained in the medium to long-term.
“Only then has the President directed that we can, as monetary and fiscal authorities, timely devise ways of re-introducing the local currency”.
Zimbabwe adopted a multi-currency system in January 2009 to foster macro-economic stability after the Zimbabwe dollar had been subdued by the hyper-inflation environment that obtained then.
Dr Gono said President Mugabe desired that the local currency, when introduced, would circulate alongside other currencies which are currently legal tender, giving Zimbabweans free choice on which currency to use.
The sustenance of the local currency which Dr Gono said may or may not be called the Zimbabwe dollar, would be gold-backed, which means Government would need to purchase adequate gold stocks from miners to build its bullion reserves.
“All the factors I have mentioned are embodied in His Excellency’s pronouncements of 5 July 2013 and there should be no confusion or panic over this noble aspiration,” said Dr Gono.
“Indeed discussions around this and many other subjects and topics have been made, and continue to be held. As Governor, I continue to draw considerable inspiration from the guidance and wisdom I get from my regular and frequent engagements with His Excellency, the President,” he added.
Online Reporter