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Browsing: Dollarize
- Zimbabwe did not have a parallel market for foreign exchange in the years running from 2009 to around 2016.
- Zimbabwe is heavily reliant on imported products and expends more foreign currency than it can afford.
- Demand pressure has contributed to the fall of the Zimbabwe dollar resulting in general inflation.
To dollarize or not to dollarize?
This question has robbed monetary authorities of sleep as the Zimbabwe dollar falls precipitously on the parallel market.
Zimbabwe did not have a parallel market for foreign exchange in the years running from 2009 to around 2016.
It all began with the introduction of a surrogate currency that was fallaciously pegged at par with the United States dollar. The authorities initially posited that the surrogate currency was supported by a loan facility extended by the Africa Export-Import Bank (Afrexim Bank).
This loan it was said underscored the parity of the currency. It did not …