The Zimbabwe Gold will regain its value if the government does this…

There is no reason why this should be tolerated. If Government wants hard currency for something, they should buy it off the market like everyone else. Then the stuff would have real value, and the real cost would be reflected in how Government spent its tax dollars.

The only way to restore sanity to our economy and stability to our money market is to increase the flow of hard currency to the interbank market where all those who need foreign exchange for whatever purpose, can buy it at a real market price or exchange rate. If we cannot introduce all the measures required to achieve this in a short period, then what we must do is take the currency being liquidated on a compulsory basis, and allow the banks to sell that currency, in ZIG on the interbank market, without restraint.

In the event that this does not satisfy demand, then increase the liquidation threshold until the currency stabilises. I would go the whole way in this process until the value of the ZIG is restored to about 12 to 1 against the US dollar in the market and then start buying hard currency off the market at 12 to 1 and putting the currency into national reserves. Even better would be to take this currency and buy gold, hold our reserves in gold rather than paper dollars in electronic form.

I would convert the national budget to ZIG in its new form and make all taxes payable in ZIG. Eventually you could dedollarise and use the ZIG as the sole means of exchange. Leave free funds in Nostro accounts and allow owners to use these funds at their discretion. Sorry to be so blunt John, but it is the only way to go forward.

(419 VIEWS)