Gono devalues dollar

Godfrey Marawanyika

THE Reserve Bank of Zimbabwe (RBZ) yesterday devalued the local currency against the United States dollar by 11% from $5 600 to $6 200 for the next three months only.


Central bank governor Gideon Gono yesterday said although he had made the adjustments it was with the approval of the government, which he thanked.


“In order to further promote foreign currency remittances under the Homelink initiative, the diaspora floor price of foreign exchange will be managed between the current auction rate of around $5 600 against the United States dollar and $6 200 per US dollar to January, 2005,” he said

“This relaxation should be viewed in the spirit of Christmas, which is traditionally a period of giving and magnanimity.”


This is not the first time Gono has devalued the local currency against the major international denominations, as in his maiden policy statement in December last year he adjusted the exchange rate.


In June, Gono again devalued the local currency under the guise of the Diaspora floor price.


Gono yesterday said that the country had since increased its monthly payment contributions to the International Monetary Fund.


“Our desire to work together with the international community also impels us to make every effort to enhance our cooperation on debt repayments to our international creditors,” he said.


“As monetary authorities, we are pleased to report that modest initiatives have been forged in this respect, with the country stepping up its repayments to the International Monetary Fund from US$1,5 million per month to US$5 million per quarter, beginning June, 2004.”


Gono also reassured potential foreign investors that their money would be protected from any obstructive practices by untoward elements of society.


“We are heartened by government’s recent decision to form an inter-ministerial taskforce on Bilateral Investment Promotion and Protection Agreements, tasked to ensure that no foreign investment agreements are violated across all sectors of the economy.”