SI142: A SWOT Analysis
A new dawn or more of the same? Many were left a little perplexed by the surprise announcement of Statutory Instrument 142 of 2019 which re-introduced the Zimbabwean Dollar. In this article, we shall 'balance' you. Strengths The forbidding of the use of foreign currencies has had the effect of forcing those who make purchases in US dollars to convert them to Zim Dollars first before making a transaction. The result is a simultaneous increase in the supply of USD on the formal and informal markets and a near-elimination of its demand for transactional purposes. Inflation is somewhat tamed as the increase in interest rates from 15% to 50% per annum means more money will be kept in the banks as savings now earn over 3 times the previous rate of return and speculative borrowing will be greatly reduced since borrowing at 50% for high-risk activities is not financially smart. Since interest rates have gone up, the supply of loanable funds will increase. Banks will now ha...