Adopt the Rand or Re-introduce the Zimbabwean Dollar: Prof Chakravarti
University of Zimbabwe economics professor and Senior Advisor of the Strategic Economic Research Program Professor Ashok Chakravarti has advised the government to either adopt the Sout African Rand or to reintroduce the Zimbabwean dollar.
Chakravarti argued that the foreign currency crisis and the cash crisis could not be resolved while using United States dollars.
Speaking at a post-budget seminar for MPs, Chakravarti said:
We cannot have a new economic order sustained by someone else’s currency, and so we need our own currency, and there are two solutions to it of which one is to adopt the currency of our main trading partner, which in our case is South Africa, and adopt the rand informally in the same way we adopted the US dollar in 2009.
The second solution is to have our own currency, and the question will be how do we maintain the value of the Zimbabwean dollar? My proposal is that we release a Diaspora bond of $1 billion, which can back the new Zimbabwean currency.
However, this view was opposed by economist Gift who argued that the Zimbabwean dollar would crash if it was introduced. Said Mugano
We cannot introduce our own currency. The proposals by Chakravarti are very sound from a mathematical point of view, but it is the same mathematical equation done by the Reserve Bank of Zimbabwe, which brought in $200 million bond notes which they said were equivalent to US dollars, but it all went in tatters. If we bring the Zimbabwean dollar, it will crash overnight like the bond note.
Special advisor to the president Christopher Mutsvangwa has also said that President Mnangagwa was working on reintroducing the Zimbabwean dollar.