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(NEWZIMBABWE) Gono makes new Zim dollar pitch

Gono makes new Zim dollar pitch
by Daniel Misi
18/08/2009 00:00:00

ZIMBABWE’S Reserve Bank governor Gideon Gono has proposed the re-introduction of the Zimbabwe dollar anchored on gold valued by an independent body.

The Zimbabwe dollar is officially dead, having been killed off in hopes of curbing record world inflation of billions of percentage points. It was replaced with the United States dollar and the South African rand.

But Zimbabwe has not formally dolarised or randified the economy.
Gono, whose policy of printing money to fund social services and government spending was blamed for fuelling inflation, told MPs on Monday that the unavailability of change of small denominations and coins will persist until the local currency was revived.

"Nobody can move me from that conviction,” Gono told the Parliamentary Portfolio Committee on Natural Resources, Hospitality and Tourism. “We anchor our Zim dollar to the gold available. It will not only be RBZ, but all stakeholders.

“A certificate will then be issued to the RBZ on the amount of Zim dollar to be printed after the committee has satisfied itself on the value of the gold.

"You can also redeem your Zim dollar in return for an ounce of gold. Say, if you want to keep gold not cash, you can go to your bank and get an equivalent of ounces of gold to the Zim dollar you have, so we will be backing our money with reality on the ground. Such an approach is not inflationary because you are anchoring your money on productivity.

"We can even print gold coins. The Zim dollar can then gain as it is anchored on gold. We need to think outside the box.”

The fate of the Zimbabwe dollar has become a contested political issue, with President Robert Mugabe and Gono leading the calls for the currency to be put back in circulation as legal tender.

Mugabe complains that most Zimbabweans lack the hard currency needed to buy basic goods.

But Finance Minister Tendai Biti, who joined the government as part of a power-sharing agreement between his Movement for Democratic Change and Mugabe's Zanu PF party, has declared the local dollar indefinitely obsolete.

He has threatened to quit if a return to the local currency is forced upon him.

"We are putting the tombstone on the corpse of the Zimbabwe dollar," Biti told lawmakers in a midyear fiscal policy statement. And in another speech to business leaders, he said, "We are no longer printing our own money."

Labels: GIDEON GONO, ZIMBABWE DOLLAR

posted by MrK @ 4:42 PM