Local Currency Re-Introduction Imperative – Economist
George Lwanda
30 September 2010
Harare – At some stage Zimbabwe will have to look at reintroducing a
currency of its own, Development Bank of Southern Africa International
project economist, George Lwanda told the Institute of Chartered Accountants
in Zimbabwe annual conference in Victoria Falls on Saturday.
He said that while doing away with the use of the local currency had enabled
the country to turn the corner with regards to inflation, using another
country’s currency had disadvantages. It meant losing control over monetary
policy, which was a means of, among other things, controlling credit.
Other countries had had similar experiences. Argentina, for instance, had
overcome inflation by dollarising but had subsequently decided it was
advantageous to return to use of its own currency.
Asked how a return to use of one’s own currency fitted in with the move
towards adopting a regional currency, Lwanda said moves towards a regional
and then continental currency had begun in the early 1980s. A regional
currency was not likely to be implemented imminently. Even if it did come
about within a few years, the country would be worse off moving from foreign
currency use to a regional currency than from its own currency to a regional
one. Countries in the region that used the South African rand as their
currency were unable to set their own interest rates. Monetary policy was
determined in South Africa.