Maravi

(TALKZIMBABWE) Dollarisation still best alternative

Dollarisation still best alternative
Sun, 17 Jan 2010 22:26:00 +0000

DEAR EDITOR - In response to an article published on your website saying that dollarisation was not working for Zimbabwe, please accept my small contribution. Sure enough the US dollar has its problems, but I personally feel that it is the only solution we have at the moment.

Your suggestion holds a lot of economic sense, but in Zimbabwe what counts most is political sense. As long as the Zimbabwean dollar is introduced concurrently with the US dollar, it is prone to abuse. You will see a parallel market emerging taking advantage of the difference in rates.

We all witnessed the misuse of the Zimbabwean dollar last year when those with access to the Reserve Bank of Zimbabwe looted all the forex in the street using the useless Zimbabwean dollar.

Maybe we should first put contingent plans to curtail abuse by the well-connected politically. Nothing has actually has been done to harness the run-away inflation?

Production is still very low in most sectors of production (agriculture, mining and industry), so there is no guarantee that our currency will not create more problems for us in as far as inflation is concerned. The ground work is still very raw.

T. Chivengwa
Zimbabwe

Labels: DOLLARISATION, FOREX

posted by MrK @ 5:48 AM