Zim 'not planning to adopt rand'

Zimbabwe is not planning to adopt the rand, Business Report said on Tuesday, citing the country’s central bank.

This followed a suggestion by President Kgalema Motlanthe that it might be practical for South Africa’s neighbour to enter into an agreement with the South African Reserve Bank and allow the rand to become the common currency to assist Zimbabwe’s crippled economy.

However, the governor of the central bank of Zimbabwe, Gideon Gono, told the newspaper that a formal arrangement with South Africa “was not an option we are considering”.

Gono also denied knowledge of a document bearing his name, which described the rand as “the naturally obvious choice to anchor the Zimbabwean dollar”.

Economist Dennis Dykes told Business Report that Zimbabwe’s “terrible monetary policy” had contributed to its dysfunctional economy.

He said that if the rand was adopted, Zimbabwe would automatically take on the interest rates and monetary policy of the South African Reserve Bank.

Mthuli Ncube of Wits Business School was quoted by Business Report as saying that replacing Zimbabwe’s currency with the rand would not be a burden to South Africa.

The rand was already being used in Zimbabwe and any official agreement to use it “would merely formalise things”, he said.—Sapa