MUTARE - Zimbabwe should adopt the rand currency of its giant neighbour South Africa as official currency to boost recovery of the countrys shattered economy, a top South African economist has said.Hubert Green, an economist with South African investment firm Total Investment Solutions, said a switch to the rand from using a basket of foreign currencies as the case presently would help cut transaction costs between the two countries that are big trading partners in addition to being strong political allies.
It makes the best sense to adopt the rand specifically because of the closeness of the economic relationship, said Green, who visited manufacturing industries in Mutare as part tour of the city organised by the Manicaland Business Council.
The government last year ditched the worthless Zimbabwe dollar and introduced a basket of currencies including the United States dollar, South African rand, British Pound and Botswana pula as legal tender, a move that immediately halted hyperinflation that had ravaged and discredited the Zimdollar.
However the unity government said it wanted the Zimbabwe dollar to be reintroduced at some point once the economy was on a sustainable path to recovery and industrial capacity utilisation was above 60 percent a target that some economists say might take years to achieve especially in the absence of significant inflows into the country foreign aid and investment.
Post published in: Economy