Zim industry proposes use of rand as reference currency instead of dollar

THE Confederation of Zimbabwe Industries (CZI), which represents most large industries, says the government should have the rand as its reference currency instead of the US dollar.

The chamber said the country’s multicurrency system should be maintained, but that financial reporting should be done in rand.

South Africa is Zimbabwe’s biggest trading partner.

“We suggest the minister of finance starts presenting his budget in rands instead of dollars,” the CZI said in proposals it will present to the finance ministry.

Zimbabwe abandoned its own currency in 2009 to end hyperinflation and uses mainly US dollars, though rands, euros, pounds and several other currencies are legal tender.

A shortage of foreign exchange after a collapse in exports caused a liquidity crisis leading to late payment for government workers.

Last week, President Robert Mugabe authorised the introduction of dollar-backed bond notes to ease a shortage of the US currency.

The CZI said it was satisfied the finance ministry and central bank had put in place adequate safeguards to ensure that bond notes were not misused.

Finance Minister Patrick Chinamasa will present the country’s budget later this month or early next month.

South Africa’s Trade and Industry Minister, Rob Davies, said the country was unlikely to lobby for Zimbabwe to join a rand monetary union.

“It’s not anything that we, particularly as the government of South Africa, are pushing for,” he said.

“It’s a sovereign decision for the government of Zimbabwe.”