RBZ refuses to devalue currency

By Staff Reporter

ZIMBABWE'S Reserve Bank Governor Gideon Gono said Wednesday he would not devalue the shaky Zimbabwean dollar, confounding expectations from many struggling businesses in Zimbabwe.

"No devaluation from this governor," said Gono as he presented a long-awaited monetary policy statement to an audience of government ministers, unionists, businessmen and high-profile Zimbabweans.

Zimbabwe's dollar has been fixed at an official rate of 250 to the US dollar since July last year, but on the widely-used parallel market the US dollar trades at around 20 times that rate.

There had been wide expectations Gono would allow the official rate to slide. But the central bank chief said it was not his responsibility to inflict the pain on defenceless consumers that rising prices would bring.

"'No amount of devaluation will lead to planeloads, truckloads of foreign exchange flowing into Zimbabwe in a sustainable way," he said, pointing out that he had already authorized more than eight devaluations since he took the reins at the central bank in December 2003.

The energetic bank chief, who is rumoured to have presidential ambitions, acknowledged that his refusal to devalue would cause disappointment. - DPA

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