RESERVE Bank of Zimbabwe (RBZ) governor Gideon Gono on Friday said the reintroduction of the Zimbabwe dollar is still a long way off, ending speculation the battered currency is on its way back. Over the past weeks, speculation has intensified that some sections of the inclusive government were preparing for the return of the reviled currency after President Robert Mugabe recently told villagers in Zhombe that the dollar would be revived.

Mugabe said this would be done because ordinary people were struggling to survive following the introduction of multiple currencies.

There were even rumours that new Zimbabwe dollar notes had been printed and the RBZ was ready for another currency change over.

"We would like to see it return, but conditions are not favourable for the reintroduction of the Zimbabwean dollar," Gono told journalists on Friday.

Gono said the reintroduction of the inflation-ravaged dollar can only be contemplated after the country achieves sustainable annual real Gross Domestic Product growth rates of 7% and more.

The International Monetary Fund estimates that Zimbabwe will grow by 3% this year as the economy reaps the benefits of the formation of a unity government between President Robert Mugabe and the two MDC formations led by Prime Minister Morgan Tsvangirai and Deputy Prime Minister Arthur Mutambara.

Gono said the country should accumulate foreign currency reserves holdings of liquid or easily tradable mineral reserves of at least US$1.5 billion to back up the reintroduction of the Zimbabwean dollar.

He said achievement of macro-economic stability in both "commodity and factor input markets, as well as achievement of operational efficiencies in parastatals, local authorities and general infrastructural systems" were paramount for the return of the local currency.

"Achievements of these preconditions cannot be an overnight event, and may take 12 to 14 months," Gono said.

"It is imperative that market players and stakeholders in all sectors of the economy optimise their trading and productive systems to be in line with the current multiple currency system as the country will be under the system for the foreseeable future."

In August, Gono stirred a hornet nest after he said the Zimbabwean dollar could be reintroduced backed by a mineral resource. He said Zimbabweans should debate the issue.

Finance Minister, Tendai Biti who has threatened to resign if the dollar is re-introduced, told a mining indaba in September that in the spirit of regional integration, Zimbabweans should think along the lines of a regional currency.

The Zimbabwean dollar was demonetised early this year in favour of a basket of currencies with the US$ being the dominant unit.

In the revival plan launched in March, the rand is used as a reference currency and there are indications it will be made the official currency when Biti announces the 2010 budget on Wednesday.

Gono warned banks against the continuation of high bank charges, commissions and lending rates of "as high as 25% when annualised.

He said if the banking sector does not heed his call, the central bank will introduce "appropriate carrot and stick frameworks for the achievement of desirable outcomes in the banking sector for the good of the economy and society in general".

Meanwhile, Gono also unveiled a US$500 million gold buying scheme, which is a joint venture between RBZ and Sino-Zim Development PTE Limited that is expected to breathe life into the mining sector.

Following the introduction of the scheme, Fidelity Printers on November 24 started paying cash for gold deliveries. Gold production had plummeted over the years owing to failure the RBZ through Fidelity Printers to pay for gold deliveries.