News of the South HARARE – Newly appointed Minister of Finance Professor Mthuli Ncube raised concerns over continued use of the United States Dollar in Zimbabwe saying the strong currency may be detrimental to the country’s competitiveness and hinted plans to return to domestic currency.
The country is in the process of trying to ascertain economic recovery and Professor Ncube said continued use of a strong US Dollar has negative effects which need to be countered through a credible economic transformation and a strategy is being mapped to ensure the country goes back to domestic currency.
“That requires steps around fiscal consolidation on Government expenditure and revenue front, also monetary policy consolidation in terms of the building blocks for full monetary policy.
“We are using US Dollar as a currency of reference, it means that the dollar will strengthen even further or most likely not weaken for sure and that hurts our competitiveness as a country receipts.
“So a stronger dollar actually in a way is not good for Zimbabwe,” Prof Ncube said.
Last week President Emmerson Mnangagwa said the nation will continue using the US Dollar until economic fundamentals allow the return of a local currency.
Prof Ncube noted that different factors were impacting on different emerging markets across the globe and that part of the volatility in Zimbabwe was driven by internal factors hence the need for reforms although to some extent external factors play ball.
He, however, said the recent rise in commodity prices such as gold, chrome, platinum and tobacco, was positive for Zimbabwe’s economy.
“There is no timeframe as fast but we need this to happen sooner than later. So, we need certain triggers such as ensuring that we have a full monetary policy committee that ensures we move to a market based allocation of foreign exchange, investors can have foreign currency accounts in dollars and build those building blocks for full monetary policy” he said.
Prof Ncube said they will build reserves, including gold reserves, in the sense of the full import cover with the need to issue a domestic currency
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