Zimbabwe re-introduces foreign exchange bureaux

HARARE – Zimbabwe’s central bank has allowed foreign exchange bureaux to resume full operations as part of reforms aimed at reviving the battered economy, the bank said on Friday.

In a mid-year monetary policy review, Reserve Bank of Zimbabwe governor Gideon Gono said the bureaux, which have in the last seven years served as money transfer agencies for Zimbabweans working abroad, could now buy and sell foreign currency to the public.In January, President Robert Mugabe’s government lifted a ban on the use of foreign currency to stem hyperinflation that had rendered the Zimbabwe dollar almost worthless.The move left Zimbabwe without an interbank market and reduced the central bank to a simple supervisory role as it lacked foreign currency reserves to be the banker of last resort.’The adopted multi-currency system, together with the liberalisation of exchange restrictions on the current account means that the public is free to transact and deal in foreign currency,’ Gono said in the review published on Friday.’This new development makes it possible for the extension of bureaux de change business to include selling of foreign exchange to individuals, using international cross-rates.’Gono – whose re-appointment to serve a second five-year term as governor is being fought by Mugabe’s arch-rival, Prime Minister Morgan Tsvangirai – said he supported plans to re-introduce Zimbabwe’s own currency only when the local economy recovers.’We will continue to carefully gauge the overall performance of the economy to inform us on the appropriate decisions or courses of actions to take, in close collaboration with our principals in the inclusive government,’ he said.The unity government formed by Mugabe and Tsvangirai says it needs about US$10 billion in foreign aid to help repair an economy which last year saw inflation surge to over 500 billion per cent, according to the IMF.But many international donors say they will only give massive support when the new administration implements radical reforms, including firm commitment to private property rights.Many Western countries imposed sanctions on Mugabe’s Zanu-PF government over charges of human rights abuses, vote-rigging and its seizures of white-owned commercial farms for redistribution to blacks without paying compensation.Mugabe, 85, and in power since independence from Britain in 1980, says Zimbabwe’s once-prosperous economy has been wrecked by sanctions and his land policy is aimed at correcting colonial injustices.-Nampa-Reuters