Mthuli Ncube's Plans To Introduce New Currency 'Stupid' - Steve Hanke

5 years agoSat, 13 Apr 2019 08:24:47 GMT

Mthuli Ncube's Plans To Introduce New Currency 'Stupid' - Steve Hanke

Minister of Finance and Economic Development, Mthuli Ncube’s plans to introduce a new currency within 12 months has been met with almost universal disapproval from analysts.

Ncube, who is currently in the United States of America, on Thursday told a US television channel, Bloomberg TV that Zimbabwe will have a fully-fledged currency within 12 months.

A local economic commentator and former advisor to the Reserve Bank of Zimbabwe, John Robertson said the current economic environment is not conducive for a new currency. Said Robertson:

The main implication is that the country will not have foreign reserves to settle foreign debts.
We can’t sustain a new currency if we still have billions in foreign debt. The value will fall because you will constantly want to convert it. We will not have respect for the new currency.
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Inflation comes because of the weakening of the currency, if the currency cannot hold its value, it will collapse. Creating a conducive environment to support a new currency should have come first. Let us have a new environment first.

World-renowned United States-based economist, Steve Hanke ridiculed the decision. Writing of microblogging site Twitter, Hanke said:

Just when you think Zimbabwe could not pull another stupid rabbit out of the hat, it does so. Ncube says a new Zim currency in 12 months. What stupidity!

The leader of the country’s main opposition party, MDC president, Nelson Chamisa had this to say:

The Zanu PF regime has to first address issues of market confidence, country-risk factor and legitimacy before even thinking of re-introducing the Zimdollar.
Anything short of that would be a waste of resources and a mockery of people’s intelligence.
We deserve decent dignified lives; prices of staples going up such as maize and wheat affect the prices of maize meal and bread.
Prices of basic commodities going wild! School fees have been revised! The RTGS$/US$ rates are falling. Savings have been eroded. Workers’ salaries remain unchanged.