In light of recent events that have seen the cash crisis in Zimbabwe worsening, the Reserve Bank of Zimbabwe has ordered all financial institutions and banks to stop giving overdrafts to all customers for cross-border transactions. Chavrate a specialist in economics said that the crisis indicated a much bigger underlying problem. He notes that without the US$ our economy has no stability due to the lack of a continuous supply of the US$. This supply is dependent on our relations with the United States of America. This shortage has plunged many local companies into debt as they fail to meet their foreign currency obligations. He cited that adopting the South African rand might be the next best move as we have a solid relationship with South Africa. However, strict measures should be put into place to avoid externalization because what happened with the US$ might also happen to the rand.
More: Financial Gazette
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