Industry Calls For Return Of Local Currency After Elections

Local companies under the Confederation of Zimbabwe Industries (CZI) have called for the reintroduction of local currency after the July 30 elections, citing the current liquidity challenges. The CZI has also advocated for the use of the South African Rand as a temporary solution. In a paper titled “Post-Election Recovery Document: Macro and Currency Draft,” CZI says,

We propose three options… to convert all RTGS dollars into new local currency, which is pegged at 1:1 with the US dollar, and thereafter float it…Ring fence RTGS dollars and undertake to repay them as US dollars in the course of time.

…adopt the rand as our new local currency with financial assistance from South Africa…The rand is a softer, more competitive currency and will still maintain…considerable stability given the size of South Africa’s economy…therefore it will likely be more stable than a local currency. The South African government could be engaged as a guarantor of macroeconomic stability.

Whilst we are currently nominally operating a multi-currency system, the reality that we have been creating funds without any backing.

More: Financial Gazette

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