Quote from: timerland on July 18, 2019, 10:17:52 PM

So basically all of us know what happened to the Zimbabwean economy at around 2007, where its hyperinflationary crisis peaked.

After that period, the government seemed to take a step back along with the central bank and say that for the interests of the economy, we're just going to not issue our own currency for the time being - but rather use USD, SA rands, CNY etc. as de facto currencies.

And then, the launched bond notes, which were supposed to be notes that have a pegged value to USD at 1:1. When I initially saw that I knew it was up to no good, since it was clear what this initiative was supposed to do in terms of being a launchpad for a new national currency.

Since then they've introduced what's called "RTGS dollars" (basically Zimbabwean dollars, except they want to dissociate from the negative connation that it brings), and removed the peg of 1:1 from bond notes (surprising, huh? Roll Eyes

)

Inflation has hit 170+% p.a. in recent days with this new currency, which is worrying since it's starting to resemble the 2007 situation all over again.

I'm interested in hearing opinions as to how the population in Zimbabwe can protect themselves given that forex is now banned essentially, and what you think the direction will be for the economy of Zimbabwe for the future.

I am a Zimbabwean based in Zimbabwe and I can tell you we have come into a full circle in a space of 10 years, from the massive hyperinflation of 2008 (I have written an article on medium about this here https://urlzs.com/zzQvY).

We then had an inclusive government in 2009 -2013 and we adopted the USD after the local Zimdollar crushed and the economy grew during this period. Then Zanu pf(the ruling political party) came back into power and things went haywire, the economy went into a downward spiral and USD notes vanished from the banks and people were left with electronic balances in their accounts.
The government thought it could solve this situation by printing what they termed ''Bond notes'' a local currency, not internationally recognised but which was pegged at par with the USD. But as you know according to Gresham's Law, ''Bad money drives out good money'' so this worsened the situation and the parallel market for money emerged. As I write to this post the Bond note is trading at 10:1 to the dollar. The government also thought it wise to ban the usage of the USD for transactions but as you know that won't work in a country that imports everything including toothpicks!.

And to answer your questions

Where is the Zimbabwean Economy going?
With the current Zanu pf government in power, there is no hope for improvement. To make matters worse they are backed by the military which even carried out a coup on the previous Zanu leader and replaced him with another Zanu leader in 2017! No one has confidence in the government and the recently introduced RTGS dollar. Memories of lost investments and pensions of 2008 are still fresh on people's minds and it will take a lot for the government to regain that confidence. The biggest elephant in the room is CORRUPTION and lack of rule of law. The country is a bad debtor internationally and because of past and present human rights violations perpetrated by the ruling party, we are under sanctions. Given the above, you can easily tell that the RTGS dollars is poised to go in one direction, down.

How we are protecting ourselves in these times.
1. People are buying foreign currency and keeping it in homes as it is more stable
2. Trade in cryptocurrencies was banned by the Reserve Bank of Zimbabwe but people are relying on bitcoin to make foreign payments and to receive remittances easily as services like Western Union are usually overwhelmed and it can take more than 2 weeks for one to get their money. Since crypto exchanges like Golix were banned we now rely on Telegram and Whatsapp groups were massive peer to peer trades take place.

There is the need for Zimbabwean entrepreneurs to come up with more innovative ideas to move money quickly and easily using the blockchain like in the case of SPENN in Rwanda as well as ways by which people can make real and secure investments in Bitcoin and crypto.