Friday, June 22, 2018

Momentum growing for Zimbabwe to return to a gold or resource backed currency

At a recent roundtable conference in Bulaways, Zimbabwe on June 15, the idea of backing the Zimbabwe currency with gold and other resources is growing in strength as both financial experts and the Deputy Finance Minister agreed that changes must be made to get the African nation out of its decades long malaise.

ZIMBABWE should re-introduce its own currency backed by commodities since bond notes and dollarisation has failed, financial expert Persistence Gwanyanya has said. 
Speaking during the CEO Africa Roundtable discussion in Bulawayo on Friday, Gwanyanya said the government needed to go back to the drawing board and come up with a permanent solution to the country's cash crisis. 
"What is a permanent solution to our cash crisis because it seems dollarisation has reached its sale by date, it would appear the best solution is for the country to re-introduce its own currency," he said.  
The plan, Gwanyanya said, would be executed through the forward sale of commodities to other countries. 
"It is easy to forward sale our gold production at $2 billion a year. If we forward sale it for five years, we get $10 billion, our tobacco production at $1 billion a year and if we forward sale it we get $5 billion. The same can be done to platinum." 
Speaking at the same event, Finance deputy minister Terence Mukupe concurred with Gwanyanya, saying the country needed to adopt its national currency. 
"We have to adopt a national currency without doubt and there has to be a cap on the maximum release of how much of the new currency you are going to put out. The numbers that are there right now are indicating that probably the maximum release should not be more than a billion dollars," he said.  – Bulawayo 24
Discussions on returning to a gold and/or diamond backed currency was first broached back in May of last year.  And as the world rushes towards de-dollarization, nations need to prepare their own economies for a day when they either can't, or no longer want to peg their currencies to the global reserve.


Post a Comment