Source: Disband RBZ: Hanke –Newsday Zimbabwe
Steve HankeAMERICAN economist Steve Hanke says the Reserve Bank of Zimbabwe (RBZ) needs to immediately be completely removed from all monetary matters, blaming the bank for all the inflationary problems facing the country.
“You got to get the Reserve Bank out of the picture. The Reserve Bank is a real problem and that is one reason, by the way, that dollarisation went away after the unity government collapsed in 2013 because the central bank was there, ready to go, and they have done nothing but bad things ever since. They were doing nothing but bad things before, but they are doing bad things, obviously, now, very bad things. So that is one option,” Hanke said.
As of August, the annual inflation rate stood at 285,02%, up from 256,9% in July, according to the Zimbabwe National Statistics Agency.
According to the RBZ, the local currency is trading at $580 to the greenback.
Hanke said there was need for Zimbabwe to consider having a currency board.
“About the only thing I would say about a currency board in Zimbabwe since I don’t trust the legal system in Zimbabwe or don’t trust the monetary authorities, I would suggest that the currency board should be located in Switzerland. It would issue Zimdollars and the reserves would be kept in Switzerland. It would operate under Swiss law,” he said.
“It would have five board members, only two of them would be from Zimbabwe. The other three would be from foreign countries not contiguous geographically with Zimbabwe. So, they wouldn’t be from Zambia or South Africa or someplace that was bordering Zimbabwe. That would be the only adjustment for proposing a currency board, ideally, for Zimbabwe.”
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COMMENTS
ZanuPF won’t take the advice because RBZ acts as the hub of the institutionalized corruption/looting currently paralyzing the nation much to the benefit of the elite…
RBZ is a Zanu franchise to take US$ and UK Pounds from the diaspora and then convert it to worthless Zimbabwe currency thereby discounting the cashflow – coming from the people they persecuted enough to leave Zimbabwe. At the same time Zanu can control and persecute the families of the diaspora who are left in Zimbabwe. It is a brilliant system of theft, control, persecution and in the final run of things – starvation and poisoning of ZANU’s opposition. The British Govt had the audacity to support this charade and term it a “military assisted transition” not a coup. Just as the British Govt did it in 1980 with Carrington, Thatcher and Kissinger putting Mugabe in – they stuck to their guns and replaced Mugabe with ED five years ago. Great to see that British leopards do not change their spots.
Professor Steve Hanke is a smart man comrades. His advice should be taken but I doubt ZANUPF would do this as inflation would go under 5 per cent and the ZW dollar would be freely convertible and there would be no black markets as we have today.
Zimbabwe and before that Rhodesia have had a black market since the imposition of exchange control in 1961 – this has of course led to chaotic and distorted markets and valuation of the currency.