"The multiple currency system adopted last month remains in force," it said.
Citing Finance Minister Tendai Biti, the report said the government had
chosen the rand because South Africa was Zimbabwe's biggest trading
partner and the most competitive country for assessing prices and wages.
"Given the United States dollar price structure we are starting with,
and the impossibility of restoring competitiveness through currency
devaluation when we are using foreign currencies, it is important that
we link ourselves to a currency that is more proximate to us," Biti was
quoted as saying.
The choice of the currency was determined by economic factors as well
as the future intention of the Southern African Development Community
to adopt a common currency, which inevitably would have to be based on
the rand given the dominance of the South African economy in the
region, the Herald said.
Opting for the rand as the reference currency should in no way reduce
government's commitment to multiple currency use, Biti was quoted as
saying.
"It is, however, the first step in anticipating an epoch when we can resume use of the Zimbabwe dollar," he said.
It was, nonetheless, necessary to first restore the multi-currency economy to a reasonable and sustainable level of activity.
The Zimbabwe government adopted a multiple currency trading system in
February whereby the rand, the US dollar and Botswana pula operate as
legal tender alongside the Zimbabwean dollar.
Business Report/SAPA
Post published in: News