South Africa Offers Rand Currency for Zimbabwe
South Africa has secretly offered Zimbabwe use of their rand as an official currency instead of bond notes it has been revealed , it has emerged amid bold admissions that this is the only way out of Zimbabwe’s growing economic and political crisis. The crisis has been sparked by Zimbabwe’s dire shortages of US dollars chosen as main currency after the collapse of the Zimbabwean dollar seven years ago characterised by catastrophic inflation.
Even Zimbabwe’s reserve bank governor John Mangudya and Finance Minister Patrick Chinamasa in May reportedly made clear their views that joining the Rand common monetary area (CMA) would be the only solution to Zimbabwe’s mounting economic problems.
Below was an interview of South Africa’s Trade Minister Rob Davies (RD) with the state media (AM).
AM: There are interest groups that are pushing Zimbabwe to join the Rand Monetary Union (RMU), especially now that there are cash shortages. Would you think this would be a prudent decision?
RD: Well, the decision is a sovereign choice of Zimbabwe. I don’t think we want South Africa to lobby for Zimbabwe to join the RMU or anything like that.
I do know that authorities in Zimbabwe are very much aware of what is happening. If your currency is the strongest currency in the world – the US dollar – that does mean you become uncompetitive.
If the rand devalues against the dollar, that means your exports are more expensive in our market and our exports to you are much cheaper – that’s a fact of life.
But it’s not anything that we, particularly as a Government of South Africa, are pushing for. It’s a sovereign decision of the Government of Zimbabwe.