Finance Minister, Professor Mthuli Ncube has said that Zimbabwe would not have phased out the multicurrency system if that was not the only option the country had to save the economic crisis.
Ncube said that the local currency is known for losing its value in 2008 so the government could not have adopted that very risky option.
He added that the United States dollar had served its purpose of stabilising the economy and was now stifling economic growth. Ncube said:
Dollarisation has acted as a break on Zimbabwe’s economic development as we are a country reliant on exports. The strong dollar stifled our competitiveness. Without our own currency, we have had no control of monetary policy. We have had no mechanism to stimulate economic activity — not exports, nor foreign direct investment — or to deal with downturns in international markets. That is why the government must introduce its own new, and permanent, fiat currency.
The minister added that replacing the multicurrency system, dominated by the very strong USD, with a weaker currency, will give exports competitiveness to bring foreign exchange to counteract the inflationary pressures.
He also said that the shedding value of the RTGS dollar also necessitated the return of the local currency.
His remarks come when economists and former Finance Minister, Tendai Biti who is also MDC vice president have said that it was essential having the local currency back.
They, however, argue that the government had not put in place measures that would sustain the local currency.
More: Nehanda Radio