Mushayavanhu said, sparking demands for legally binding guarantees.
RBZ Deputy Governor Dr.
Innocent Matshe acknowledged the challenges posed by low liquidity, saying, “This economy is affected by low liquidity, especially in US dollars, which we cannot control at all. ” He believes that de-dollarization is the best route to gain control over monetary policy and drive economic growth.
The plan to remove the US dollar could lead to market instability, decreased investor confidence, and increased volatility in the stock exchange.
The transition could also lead to higher inflation if not managed properly, and Zimbabwe has experienced high inflation in the past.
While the government’s plan to transition to a domestic monetary system may have good intentions, it is crucial to address the concerns and challenges associated with de-dollarization to avoid potential risks and instability.
The RBZ needs to refine the timeline and implementation details, build adequate foreign exchange reserves, and ensure policy consistency to make the transition successful. 🔗 Read Full Article
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