Biti: Zim dollar return 'very long way' off

Zimbabwe will not return to using its own currency in the near future, and any move back to the Zimbabwe dollar will be linked to export strength, Zimbabwe’s finance minister Tendai Biti said on Monday.

“It is not our intention to depart in a hurry from the regime of multiple currencies that we are using at the present moment,” Biti said in an interview with Reuters television on the sidelines of an Africa forum.

“There is no reversion to the Zimbabwe dollar at all. If it happens, it will depend on the performance of our economy, the performance of our exports. We are still a very, very long way to the return of the Zimbabwean dollar.”

Zimbabwe has allowed the use of multiple foreign currencies since January to stem hyperinflation which has left the Zimbabwe dollar almost worthless in the midst of a severe economic crisis.

President Robert Mugabe has said Zimbabwe may revive the use of its own currency because the US dollar was unavailable to a majority of people in the countryside.

Biti told Reuters that inflation would reach 3% to 4% this year, after averaging -2% over the January-June period.

Zimbabwe recorded a monthly inflation rate of -1% in May.

The last inflation figure announcement before the country permitted the use of foreign currencies was in October, which showed prices racing along at a record 231-million percent.

Biti also said Zimbabwe needed budgetary support.

“We expect our 2009 budget to be $1-billion, I expect to collect $800-million by the end of the year.
This will leave us a shortfall of $200-million.”

Biti said Prime Minister Morgan Tsvangirai had a “very successful” trip last month to the United States and Europe, which he hoped would help the country to attract money to plug the budget gap.

The International Monetary Fund said last week that improved economic policies in Zimbabwe had led to a “nascent” recovery in the economy, but that the country must clear more than $1,1-billion in areas to creditors before it can qualify for IMF financial aid.

“Three things are critical—Zimbabwe has to reengage with its friends, we need development assistance and we need trade finance in the immediate short term,” Biti said.

“The real challenge is the mistrust of the international community of this inclusive government experiment.”

Rivals Mugabe and Tsvangirai are seeking $10-billion to rebuild Zimbabwe’s economy. - Reuters

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