'No early Zim dollar return,' says Mugabe

Published: 08 July 2013

President Mugabe has revealed that a Zanu-PF Government will not rush to re-introduce the Zimbabwe dollar if elected to power on July 31 as the party is mindful of avoiding a repeat of the hyperinflationary period experienced before the adoption of the multiple currency system in 2009.

Addressing thousands who gathered for the launch of the Zanu-PF election manifesto at the Zimbabwe Grounds in Highfield in Harare on Friday, President Mugabe said although consultations were underway to see how the local currency would be reintroduced, his party would not rush the process.

He reiterated that his Government will be out to avoid a repeat of the sanctions-induced economic meltdown that saw the Reserve Bank of Zimbabwe resorting to printing money and slashing zeroes to deal with hyperinflation.

The then Acting Finance Minister, Patrick Chinamasa, introduced the multiple currency system in January 2009 after hyper-inflation had severely crippled the economy.

"Tanga takusvika kumabillions, kumamillions uko kuti tiwane one US dollar. Zvino ndozvatakatorera American currency. (besesifika kuma billions,kuma millions ukuze sithole ione US dollar. Yikho esakuthathela iUS dollar.)

"Asi tichasvika patichati ayewa takuda kudzokera kuZim dollars dzedu. Asi tichadaro tichiwona kuti tirikuisimbaradza mari yedu," he said. (Kodwa sizafika lapho esizakuthi cha sesifuna ukubisela izim dollar)

Mugabe hinted that Zanu-PF will introduce a strong gold-backed currency once the economy has stabilised.

"We have huge gold deposits in this country and we want to use this resource to back our currency.

"If we back our local currency with gold, it is possible for such a currency to be equivalent or to be even valued higher than the US dollar.

"It all depends on what we do with the gold" he said.

President Mugabe disclosed that he has already held discussions with Reserve Bank of Zimbabwe Governor Dr Gideon Gono on the modalities of introducing a gold- backed currency, a system which is internationally accepted and has been in existence since ancient times.

"We have been discussing the issue with (Dr) Gono but Government will be in overall charge of implementing the system.

"We will be able to print our own money and make sure that our money does not become a victim of inflation when we print at the RBZ.

"The reality is that we are not able to print the US dollar and because of the sanctions there are many restrictions for us to access money from the west," he said.

President Mugabe noted that people living in the rural areas are struggling to lay their hands on the US dollar and have since resorted to barter trade.

"The situation is not desirable in the rural areas because most households do not have access to the US dollar especially when they are not formally employed.

"At times they have to resort to barter trade and part with their priced possessions even though they also know that the US dollar has strong value," he said.

The concept of a gold backed currency is anchored on the premise that the central bank holds a large amount of gold in relation to the value of its currency.

Zimbabwe has extensive gold deposits across the breath of the country and much of it is still unexplored.

- sundaymail