Renowned South African economic analyst Daniel Silke cautions against placing too much faith in the currency’s ability to single-handedly solve Zimbabwe’s economic woes. Silke suggests that while a new currency may offer a temporary reprieve, lasting stability requires comprehensive economic and political reforms. He emphasizes to FORBES AFRICA, “A new currency is like putting a plaster over a wound, rather than treating its cause.” Silke’s analogy underscores the deeper structural issues facing Zimbabwe’s economy, highlighting the need for systemic change beyond mere currency reform.
Marisa Lourenço, an independent political and risk analyst, echoes Silke’s sentiments, expressing skepticism about ZiG’s potential impact on inflationary pressures. Lourenço points out that Zimbabwe’s history of currency failures highlights the need for more than just a change in currency. She emphasizes the importance of building reserves, committing to long-term monetary policies, and tackling corruption to address root causes of economic instability. “Printing money actually drives up inflation, which we have seen happen before in Zimbabwe,” she asserts in an interview with FORBES AFRICA, underscoring the complex interplay between monetary policy and inflation dynamics, suggesting that ZiG may not provide the desired solution to Zimbabwe’s economic challenges.
Source link : https://www.forbesafrica.com/current-affairs/2024/04/08/can-zimbabwes-new-gold-backed-currency-solve-its-economic-woes-experts-weigh-in/
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Publish date : 2024-04-08 07:00:00
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