"The Reserve Bank has totally discredited itself," he told Reuters in an interview.
"We must accept that the Reserve Bank is at the core of this economic decay. I make no apologies for those statements."
Analysts say the central bank has helped ruined the economy by printing
money and providing trillions of Zimbabwe dollars to state companies
and government departments outside the budget, which has fuelled
inflation, the world’s highest.
Prime Minister Morgan Tsvangirai’s MDC wants to curtail the Reserve
Bank’s operations and wants it to focus on taming inflation and
exchange rate management the bank operates independently from the
government.
That could set Biti against central bank chief Gideon Gono, a Mugabe
ally, at a time when strong cooperation between government officials is
needed to rescue the battered economy.
Biti said he would meet Gono soon. He did not give details.
The new unity cabinet already faces a credibility test just a few days after new ministers were sworn in.
A senior MDC official, Roy Bennett, has been charged with planning
terrorism and insurgency and is expected to appear in court on Monday,
his lawyer Trust Maanda said.
Foreign investors and Western donors want concrete signs of stability
in Zimbabwe. They have made it clear that funds will not flow to the
nation until a democratic government is created and economic reforms
are made.
SOUTH AFRICAN SUPPORT
Biti said Zimbabwe was looking to South Africa, the continent’s biggest economy, for help.
"South Africa is going to be key in the support it will give to
Zimbabwe either as budgetary support or lines of credit," Biti said.
South African Finance Minister Trevor Manuel told Reuters last week
that South Africa stood ready to coordinate financial support for its
impoverished neighbour Zimbabwe, whose economy has continuously
contracted in the last decade.
South African President Kgalema Motlanthe has said that Zimbabwe could adopt its rand currency.
Zimbabwe’s economy is in free fall and its dollar virtually worthless,
leading the government to allow the use of the U.S. dollar, the rand
and other currencies. Hyperinflation and shortages have forced many
Zimbabweans to buy basic goods in South Africa, the continent’s biggest
economy.
Biti said adopting the rand currency would not resolve the country’s problems without a package of economic reforms.
"Using the rand on its own without addressing fundamentals that have
led to this economy where we are will not work. It doesn’t benefit
Zimbabwe or South Africa," said Biti.
The finance minister said he would engage Western donors who are
sceptical of the power-sharing government with Mugabe and have set
conditions for the release of aid.
(Reuters)
Post published in: News