RBZ calls for gold-backed Zimdollar

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ZIMBABWE needs to look at the possibility of using its abundant gold reserves to bring back into use the now moribund local currency, Reserve Bank of Zimbabwe Governor Dr Gideon Gono has said. Dr Gono, who was giving an update on the state of the country’s banks to the media recently, warned that the inflationary effects of the United States of America deficit financing of its budget was likely to have an impact on other countries leading to a resistance of the greenback as a base currency. He said the fall in value of the US.dollar around the globe is likely to force Zimbabwe to move towards a gold backing for its own currency. As a result of these developments on the global market, he said, there was greater need for Zimbabwe to use its unparalleled mineral strength to return the Zimbabwe dollar on the market. “There is a need for us to begin thinking seriously and urgently about introducing a gold-backed Zimbabwe currency that will not only be stable, but internationally acceptable,” said Dr Gono. “We need to rethink our gold-mining strategy, our gold-liberalisation and marketing strategies as a country. “The world needs to and will most certainly move to a gold standard and Zimbabwe must lead the way.” He said Zimbabwe must be inspired by the 2008 global financial crisis and take a new approach to self-reliance when running its economy. “The events of the 2008 global financial crisis demand a new approach to self-reliance and a stable mineral-backed currency and to me gold has proven over the years that it is a stable and most desired precious metal,” Dr Gono said. “Zimbabwe is sitting on trillions worth of gold reserves and it is time we start thinking outside the box, for our survival and prosperity.” Zimbabwe possesses huge gold reserves, although the country has seen its annual production dramatically plummeting due to the illegal economic sanctions imposed against the country by the West after it embarked on the land reform programme in 2000. At peak the country’s gold output neared 30 tonnes in 2005.

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