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(NEWZIMBABWE) SADC regional currency to replace Zim dollar?

SADC regional currency to replace Zim dollar?
by Business Reporter
29/08/2010 00:00:00

FINANCE Minister Tendai Biti says the existing multiple currency regime will stay in place until 2012 when it is likely to be replaced by a single currency for the Southern Africa Development Community (SADC).

Biti told a meeting of the Institute of Chartered Accountants of Zimbabwe in the resort town of Victoria Falls that it was likely the Zimbabwe dollar would not be brought back into circulation.

“We have said the currency regime will only be looked after 2012.

“The debate is then what happens after 2012. It will depend more on regional integration as you know that respective states are working towards integration and the possibility of using a single currency,” he said.

However the regional block says it hopes to achieve monetary union in 2016 and implement a single currency by 2018.

The country abandoned use of the virtually worthless Zimbabwe dollar in 2009 opting for more stable currencies such as the South African Rand, the Botswana Pula and the United States Dollar.

The decision helped end years of hyperinflation and reverse a decade-long economic decline.

Still, the coalition government appears divided over the issue with members of President Robert Mugabe’s Zanu PF insisting on re-introducing the Zimbabwe dollar while the other coalition partners argue that the country’s economy has not recovered sufficiently.

Meanwhile Biti also confirmed that the debt-ridden Reserve Bank of Zimbabwe would sack at least 2000 employees from its bloated workforce as part of efforts to streamline its operations.

The bank’s staff complement rose from under 1000 to 2600 over the last few years as the institution printed money for various quasi-fiscal operations that included provision of direct funding to nearly all economic sectors.

Critics claim these activities helped stock inflation while the bank insists they prevented the country’s total economic collapse.

Biti also said the government would not take over the bank’s US$1.1 billion debt until the legal requirements were satisfied adding the matter was being discussed by the coalition principals.

“Legally, the Government cannot just inherit the debt. It will be against the law, and what it means is that there has to be a legal instrument put in place by an Act of Parliament,” he said.

President Mugabe recently invoked the presidential powers temporary measures legislation to bar the seizure of bank assets by companies owed various sums the institution.

Labels: CURRENCY, SADC, TENDAI BITI

posted by MrK @ 8:16 AM