Reserve Bank of Zimbabwe governor John Mangudya says Zimbabwe cannot adopt the South African rand as the main trading currency. This is b...
Reserve Bank of Zimbabwe governor John Mangudya says Zimbabwe cannot adopt the South African rand as the main trading currency.
This is because doing so could worsen the economic crisis facing the country.
Mangudya told local media that, apart from macro-economic pressures that could spell doom for the local economy, Zimbabwe was likely to face legal hurdles in the adoption of the rand since it was not a member of the Rand Monetary Union (RMU).
Presently, the RMU comprises SA, Namibia, Swaziland and Lesotho, although the three countries still operate their own currencies, which trade on par with the rand.
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“What you are asking for is very dangerous because we might find ourselves in a worse situation. We cannot be members of the RMU without our own currency,” Mangudya said, adding that membership of the SA-led union was conditional on having a local currency.
The RBZ chief was responding to mounting pressure from industry, businesses and consumers in general for the adoption of the rand to replace the US dollar as the main trading currency.
Local economists have advised that the adoption of the rand could help reduce the concentration risks and inflationary pressures associated with the firming dollar.
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