By Lazarus Nyagumbo.
Manchester. (News of The South) – Every country must and got own local currency apart from those in a monetary union eg € or ZAR.
Instead of advocating for the disbanding of bond notes, it’s better to suggest that bond notes floating exchange rate is more plausible than fixed exchange rates in market based economy
Self Interests aside, bond notes or domestic currency is plausible for domestic monetary manipulation as dictated by macroeconomic fundamentals at any particular economic cycle stage eg expansionary monetary policy during a recession or restrictive monetary policy during a boom. The main selfish reason why most domestic economy based Zimbabweans especially consumers keep on advocating for USD and banning bond notes is none other than the ease to import anything outside ZIM provided by USD, the global reserve currency.
But if we really decide to be patriotic and real economists, we shall agree that a stronger currency like USD is anti Zimbabwe’s economic recovery growth and development because it makes our exports relatively expensive and imports cheaper. The consequence is a growing consumer economy with high marginal propensity to import anything and a dwindling producer economy. You all know that an economy can only earn forex through exports and lose the same much needed forex via excessive imports. The proverbial result is an economic quagmire or recession with a rising BOP DEFICIT, to what end*? Do you know what this mean?
It actually mean the present generation is consuming on behalf of future generations. Who’s going to pay off the rising BOP DEFICIT caused by unsaturated present consumption??? The future generations who didn’t enjoy our present consumptions will have to pay. Is this fair to future generations?
Let’s embrace sustainable economic recovery growth and development consumer, producers and govt behaviours for the betterment of our legacy to future generations. Or our kids will earn less and less, consume less and less in future.
®TLN Economics, 2018.
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