Chinamasa: Zimbabwe not yet ready for its own currency

By: 
Xinhua
Source: 
xinhuanet.com

FINANCE Minister Patrick Chinamasa said Friday the country is still far from having its own currency.

Zimbabwe adopted use of multiple currencies in 2009 after its currency had been rendered worthless by a decade of hyperinflation.

The U.S. dollar has been the main transacting and trading currency but there has been an acute shortage of the greenback, resulting in authorities introducing local bond notes in November last year to ease the bank note shortages.

However, the supply of the bond notes has remained limited and the country continues to face cash and liquidity challenges.

Speaking at a post-budget meeting, Chinamasa said Zimbabwe will only be able to re-introduce its own currency after addressing key macro-economic fundamentals that include having sufficient reserves for imports.

"We are not yet ready for our won currency until we have done certain things which include addressing the budget deficit, addressing the issue about import cover. If I got six months cover, that is good enough but at the moment its 0.7 months cover. This is not good enough.

"We need to address the issue of trade balance especially where our imports are not adding value to the economy," the minister said.

The minister said one feasible way of building up reserves to support national currency is to resuscitate a few idle gold mines through joint ventures so that they can produce gold solely to build up reserves.

"What I have in mind is that there are a lot of gold mines sitting idle for lack of capitalization. We can take one, two or three of those mines to produce gold not for disposal but to build the serves so that we can build an anchor to any future currency that we may want to introduce," Chinamasa said.

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