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Dedolarise to stabilise ZiG- ZNCC CEO

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Dedolarise to stabilise ZiG- ZNCC CEO

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ELLEN MLAMBO
MIRROR REPORTER

MASVINGO – Government must de-dolarise in order to stabilise the ZiG, Zimbabwe National Chamber of Commerce (ZNCC) CEO, Christopher Mugaga has said.
He was speaking at the ZNCC organised Monetary Statement and Structured Currency review breakfast in Masvingo where Reserve Bank Governor, Dr John Mushayavanhu was the guest of honour.
He said the ZiG will remain a subdued currency as long as the US$ remains one of the official currencies.
He said that the bigger picture that should preoccupy the nation is how to exit the US$.
“At one point I was scratching my head and saying to myself why did we allow multi-currency to come into play. Why not just use the Zimbabwean dollar and see how it goes. This is not a ZNCC position, mind you. There is a risk in comparing your currency with the reserve currency like the US$ which you know is as good as any reserve currency.
“It is difficult to have a multi-currency and avoid arbitration and speculation naturally. So we have to guard against that. I was thinking one day, just pushing away and say we are starting using ZiG and let’s see how it goes. It is a legal tender let it work that way. “Even the Rand in its stability, it failed to compete against the US$ in this economy. The US$ economy is difficult to survive. Let’s not use the calendar dates to decide when to exit the currency regime,” he added.
Mugaga said another challenge that his organisation has is the use of delegated Statutory Instrument in managing the currency.
“Whenever you are managing a currency, let’s try to avoid use of delegated pieces of legislation, you don’t legislate against currency stability you just put the fundamentals in shape. The risk of using an SI is that you start losing confidence from a legislature side. “Our plea to banks is to coordinate with the Central Bank and business community. The erosion of confidence in currency management for years has been very unsustainable. We had six attempts in trying to get something right regarding currency management in this country. “If you see a drop of confidence, it is as a result of the past, bond notes came and they failed to do well, auction came and briefly made sense to a certain extent. Another biggest challenge has been money supply growth,” he added. He said the role of ZNCC is being the voice of business.

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