Finance minister,Biti ‘to revive Zim dollar’
Finance minister has vowed to “save the Zimbabwe dollar” and avoid resorting to South Africa’s rand as part of his plan to rescue the country’s economy.
“We have to make sure that we start by saving the Zimbabwe dollar. ‘Randising’ the economy is not the solution,” Tendai Biti told the Sunday Times.
“Our money can only be saved by floating the Zimbabwe dollar so that it finds its natural value,” he added.
In November, Zimbabwe Reserve Bank governor Gideon Gono accused rogue traders of engaging in fraudulent activities fuelling widespread cash shortages in the inflation-wracked country.
Gono, who has presided over the world’s highest inflation rate — officially at 231 million percent in July — had his contract extended until November 2013.
Biti told the paper that he would attempt to sideline the Reserve Bank governor and take direct control of inflation management and fiscal policy.
“We will wait and we shall see. We will make sure that the role of the Reserve Bank becomes minimal,” said Biti.
“We want to establish the real interest rates and encourage savings for the country and make sure that these contribute between 1 and 2 percent of the country’s GDP.”
The Zimbabwean Zim dollar, once on par with the British pound, has been reduced to almost nothing.
The central bank in February knocked 12 zeros off the local currency — reducing one trillion dollars to one dollar.
Biti, a lawyer by training, was the Movement for Democratic Change’s (MDC) secretary general and part of the party’s negotiating team which helped usher in the power-sharing deal.
He was sworn in as minister of finance on Friday as part of the new unity government.
MDC chief Morgan Tsvangirai was made prime minister.
Posted by Wellington Chadehumbe
on February 15, 2009. Filed under Financial News.
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