The southern African state has allowed the use of multiple foreign currencies since January to stem hyperinflation which had rocketed to over 230 million percent and left the Zimbabwe dollar almost worthless.
The state-controlled media said the unity government of Mugabe and opposition leader Morgan Tsvangirai decided the Zimbabwe dollar should only be reintroduced when industrial output reaches about 60 percent of capacity from the current 20 percent average.
"The Zimbabwe dollar will be out for at least a year. We resolved that there will be no immediate plans to (re)introduce the money because there is nothing to support and hold its value," the newspaper quoted Economic Planning and Development Minister Elton Mangoma as saying.
"Our focus is to first ensure that we have a vibrant industry. If we try to reintroduce the local currency now, it will face the same fate of being wiped out of its value within weeks." On Thursday, Zimbabwe's Central Statistical Office (CSO) said consumer prices fell for a third straight month in March after the government abandoned its worthless currency.
The CSO said inflation stood at -3.0 percent month-on-month in March compared with -3.1 percent in February, as food prices fell.
Critics say Mugabe, who has led Zimbabwe since independence from Britain in 1980, has destroyed one of Africa's most promising economies through controversial policies, including the seizure of white-owned commercial farms for redistribution to inexperienced black farmers.
Mugabe, 85, denies the charge and says the economy has been sabotaged by enemies opposed to his nationalist policies.
Zimbabwe is seeking an urgent cash injection of $2 billion to stabilise an economy suffering unemployment above 90 percent and a severe shortage of foreign currency.
Western donors have held back aid, demanding the unity government in which Tsvangirai is the prime minister undertakes political and other reforms.