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Rand vs dollar for Zim: Why rand as main unit would be prudent

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Cape Town - A central bank official said it would be “prudent” for Zimbabwe to use the rand rather than the US dollar as the dominant currency as the southern African country seeks ways to ease a shortage of foreign exchange.

“We can benchmark pricing with the rand, which we can’t do with the dollar, because we trade almost nothing with the US,” Kupukile Mlambo, Deputy Governor of the Reserve Bank of Zimbabwe, told a gathering of business leaders Wednesday in the capital, Harare.

Zimbabwe abandoned its own dollar in April 2009 as runaway inflation rendered it worthless, using instead a mix of foreign currencies that now includes US dollars, pounds, euros, rands, yuan and Botswanan pula. In an effort to address a shortage of banknotes, the government in November started printing and distributing dollar-denominated notes backed by reserves in the US currency, prompting protests from locals skeptical about the new currency’s value.

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