Gono nudges Zimbabwe towards yuan
28/11/2011 00:00:00
by Business Reporter
RESERVE Bank governor Gideon Gono has warned that Zimbabwe’s nascent economic recovery is at the mercy of the United States dollar, which is facing new pressures from the Euro-zone debt crisis.
Gono says Zimbabwe should in fact be looking to the Chinese yuan as its main currency, while urgently seeking to restore its own currency which was abandoned in 2009 after a dramatic loss of its value.
Speaking in Gweru last Saturday, Gono said: “The extraordinary happenings in Europe where economic power houses in the Euro-zone have been hit by a debt crisis deserves extraordinary measures, especially here in Zimbabwe where we have adopted the U dollar as the major currency in our multi-currency regime.
"With the continuous firming of the Chinese yuan, the US dollar is fast ceasing to be the world's reserve currency and the Euro-Zone debt crisis has made things even worse.
“As a country, we still have the opportunity to avoid being caught napping by adopting the Chinese yuan as part of consolidating the country's look East policy.”
China is now Zimbabwe’s biggest trading partner, with the Asian giant absorbing most of the country’s mineral and agricultural produce.
Vice President Joice Mujuru first raised the possibility of adopting the yuan in September last year, saying it would be a “logical step” and could help solve some of the country’s liquidity constraints.
The multiple currency regime announced in January 2009 has been fraught with difficulties. Retailers are supposed to accept the Euro and the British pound but those two currencies have never caught on, with most transactions being conducted in United States dollars, the South African rand and the Botswana pula.
Finance Minister Biti presented his 2012 budget last week and expects the multiple currency regime to remain in place at least until the end of 2012 when ministers hope it would be replaced by a single currency for the Southern Africa Development Community (SADC).
Gono, speaking at theConfederation of Zimbabwe Industries' (CZI) end-of-year business dinner, said the use of foreign currency was ultimately unsustainable in the long run.
“As long as we continue to use other people's currencies, where we do not have control over that currency, we are not going anywhere as a nation,” he said.
“At the moment the US dollar is going down the tube owing to the Euro-zone debt crisis and as a country, we are also going down the tube because we do not have control of that currency.
"The year 2012 should thus see Zimbabwe coming up with its own currency which we should be using without ruling out the multicurrency system until the economy stabilises.”
The demise of the Zimbabwe dollar is attributed in no small measure to Gono’s policy of printing money, but he insists that his actions were in response to an unprecedented economic crisis which called for “extraordinary measures”.
Labels: GIDEON GONO, YUAN, ZIMBABWE, ZIMBABWE DOLLAR
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COMMENT - I'm sorry, but where is the outcry, the bile, the patronisation, the derision heaped upon Vice President Joice Mujuru when she suggested this very same concept? It is bad and wrong when it comes from the ZANU-PF, but it is just right and subject to consideration when it comes from one of the MDC factions?
Mutambara backs Chinese currency
by Staff Reporter
02/10/2010 00:00:00
DEPUTY Prime Minister Arthur Mutambara has backed calls to include the Chinese Renminbi among the country’s basket of currencies. Professor Mutambara made the suggestion during a visit to China where he attended the World Economic Forum, the Shangahi World Expo as well as meetings of the United Nations Conference on Trade and Development (UNCTAG) Forum.
He also held meetings with the Chinese Deputy President Xi Jinping and Prime Minister Wen Jia Bao. Professor Mutambara backed recent calls by other leaders of the coalition government to include the Chinese Renminbi among the foreign currencies being used in the country.
Vice President Joyce Mujur recently said use of the Chinese currency could help ease Zimbabwe's liquidity constraints.
Trade between Zimbabwe and China has increased over the years as the country actively pursued the so-called Look East policy after falling out with the West.
Government abandoned the Zimbabwe dollar in 2009, replacing it with more stable currencies such as the Botswana Pula, the South African Rand and the US dollar.
However the country continues to battle liquidity constraints as the economy’s export sectors take longer to recover from a decade-long decline while international support remains limited.
Meanwhile, professor Mutambara also urged Chinese investors to give Zimbabwe a look-in saying the coalition government had managed to bring about economic and political stability since assuming office.
“(We) take our challenges as opportunities and not insurmountable problems,” he said.
He said attractive “win-win” opportunities existed in the country’s mining, infrastructure, agriculture, financial services as well as manufacturing sectors.
Professor Mutambara urged Chinese investors to look beyond resources and consider “diversification … into professional services, financial services and beneficiation”.
He said developing countries such as Zimbabwe could learn important lessons from China’s economic success.
These included the importance of growing domestic demand and driving indigenous entrepreneurship.
The Chinese economic model showed the significance of “focus, discipline, self-respect, national cohesion, self belief, history of achievements”, he added.
“(There is no need for) regrets (over the) past, without Mao there will be no Deng Xioping (Chinese reformist leader who led the country to a market economy)!”
Labels: ARTHUR MUTAMBARA, RENMINBI, YUAN
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Mujuru wants Zim to adopt Yuan
by Staff Reporter
06/09/2010 00:00:00
VICE President Joice Mujuru said Monday that Zimbabwe should consider adopting the Chinese Yuan, in line with the country’s policy of using multiple currencies to tackle hyperinflation. Mujuru said China is now Zimbabwe’s biggest trading partner, with the Asian giant absorbing most of the country’s mineral and agricultural produce.
“Adopting the Chinese Yuan would be a logical step and could help solve some of the country’s liquidity constraints,” Mujuru was quoted as saying by South Africa’s 702 Talk Radio.
The multiple currency regime announced in January 2009 has been fraught with difficulties. Retailers are supposed to accept the Euro and the British Pound but those two currencies have never caught on, with most transactions being conducted in United States dollars, the South African rand and the Botswana Pula.
Shops have also struggled with change, forcing Finance Minister Tendai Biti to announce plans to import foreign smaller denomination notes and coins. Retailers have resorted to asking shoppers to take other goods in lieu of their change.
In some cases shoppers are given a "credit note" instead of their change when buying goods. The credit note can be redeemed for more goods later but only in the same shop.
Recent reports claimed some people had taken to washing dirty US$1 bills, worn-out from over-use to improve their appearance.
With the export sector still trying to recover from a decade-long economic crisis and the hoped-for windfalls from foreign donors not materialising, Zimbabwe has been hit by a liquidity crisis.
Finance Minister Biti last week said the multiple currency regime would remain in place until 2012 when ministers hope it would be replaced by a single currency for the Southern Africa Development Community (SADC).
Labels: CURRENCY, JOICE MUJURU, YUAN
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