Zimbabwe is reportedly considering setting up a currency board to support the weak Zimbabwean dollar which is losing value rapidly even on the official forex auction.
On Wednesday, 10 August 2022, the foreign exchange weighted average rate fell to US$1: ZWL$478.6358 from US$1: ZWL$458.3653 announced by the RBZ last week.
Speaking at an economic conference in the resort city of Victoria Falls on Thursday, Ashok Chakravarti, a member of the Reserve Bank of Zimbabwe’s monetary policy committee (MPC), said:
The issue of the currency board is being looked at. It’s been done by 40 countries before, but it also requires a substantial amount of reserve money. It is being considered.
According to online sources, a currency board is an extreme form of a pegged exchange rate.
The management of the exchange rate and the money supply is taken away from the nation’s central bank if it has one.
In addition to a fixed exchange rate, a currency board is also generally required to maintain reserves of the underlying foreign currency.
Bloomberg reported Chakravarti as saying Zimbabwe will need about US$700 million to back the domestic money in circulation.
More: Bloomberg
Another corrupt deal.
Corruption is the only surgery option left for clueless regime…
THE DEAD HORSE THEORY
1. Buying a stronger whip
2. Changing riders.
3. Threatening the horse with termination
4. Appointing a committee to study the horse.
5. Arranging to visit other countries to see
how others ride dead horses.
6 .Lowering the standards so that
dead horses can be included.
7. Re-classifying the dead horse as “living impaired”*
8. Hiring outside contractors to
ride the dead horse.
9. Harnessing several dead horses together to increase the speed.
10. Providing additional funding and/or training to increase the dead horse’s performance.
11. Doing a productivity study to see if lighter riders would improve the dead horse’s performance.
12. Declaring that as the dead horse does not have to be fed, it is less costly, carries lower over head, and therefore contributes substantially more to the bottom line of the economy than do some other horses.
13. Re-writing the expected performance requirements for all horses.
14. Promoting the dead horse to a supervisory position of hiring
another horse.