No imminent return for Zimbabwe dollar – central bank

By Chipo Musoko, HARARE, August 7 (The Source) – Zimbabwe has no plans to reintroduce the local currency, the central bank has said, in a move to quell widespread speculation triggered by ZANU-PF’s election victory.
There has been a run on banks since the announcement of the election results, which the opposition has disputed.
In a statement, Reserve Bank of Zimbabwe governor Gideon Gono said there were no plans for the immediate or near-term introduction of a new currency or the re-introduction of the Zimbabwe dollar, which was decimated by hyperinflation in 2008 and was replaced by the use of foreign currencies, mainly the United States dollar and South Africa’s Rand.
“The President (Mugabe) clarified this issue, for the umpteenth time, stating the same position as we are alluding to that when the time comes, we will be very cautious and gradual about it,” Gono said.
“The multi-currency regime will be with us for the foreseeable future and in any case, when the time comes, the local currency will circulate alongside other existing currencies with people exercising their choice of currency to hold.”
Gono said there were preconditions which must be fulfilled in order to make the return of the local currency “technically feasible, financially viable to the economy and economically sustainable.”
Zimbabwe introduced the multi-currency system in 2009 to curb runway inflation which at its peak in December 2008 hit 500 billion percent, according to IMF figures.
Gono urged calm in the banking sector, which is also expected to be a prime target for ZANU-PF’s indigenization programme, which seeks to localise ownership of all foreign-owned firms.
Two days after the announcement of the election results, the Zimbabwe Stock Exchange industrial index plunged 11.1 percent to 205.6 points as foreign investors became jittery. The biggest decline was recorded in clothing retailer Edgars, which shed 28.6 percent to 10c, followed by hotelier African Sun down 25 percent to 1,5c and beverage maker Delta, which retreated 20 percent to 120c.
The mining index also lost ground, sliding 2 percent to 65 points.