Abstract. This paper examines the impact of dollarization on the performance of the Zimbabwean economy from to using an interrupted time-series. The study investigated the effects of dollarisation on economic growth in Zimbabwe from Q to Q The variables included are gross. Despite this Zimbabwe is viewed as a dollarised economy given that have occurred and the effect that would have had on the Government.

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Gradually businesses had lost lines of credit to recapitalise, and there was also limited access to foreign dolllarisation to procure required resources. Of course, since dollarization began a sizable number of Zimbabweans have emigrated, many of them of working age; that is to say, within the PEA.

The dollarized country, i maintain, can count on the implicit support of the U.

Search is limited to the most recent articles. Dollarization and economic development in Zimbabwe: How to cite this paper: Due to the hyperinflation, savings were wiped out. Dec 8, 4, These high interest rates once again hinder growth, and reduce the economic agents who are able to access loans.

In the last years there has been a strong increase in the internal debt approved in the budgets, although this has not happened to worry the legislative confines of the inclusive government.


Next Post Mugabe attacks state media over Gono blackout. To facilitate this, the Reserve Bank will be issuing instruments against amounts owed to banks as statutory reserves. Advertise Advertising on Polity. Through analysing data from interviews and secondary sources, the research established that dollarization brought about stability in the economy, arrested inflation, and caused a marginal increase in GDP.

Solutions and the timeline. To its own peril and more so that of the economy the RBZ chose quantitative easing. Importantly though, for this to work property rights would have had to be restored and the Government be seen to be committed to this to allow much needed foreign investors to participate in the recovery.


When capable farmers were driven off their farms through the Fast Track Land Reform Programme FTLRP and replaced with farmers the majority of whom lacked expertise and equipment, revenue from these activities fell by a large percentage.

Commerce and services grow rapidly in Zimbabwe, encouraged by dollarization.

The rate of unemployment also fell. However, various senior members of Government privately benefitted from the war and did nothing to stop it; a planned demonstration by the public about the war was quashed. At this point the economy was still salvageable and the Reserve Bank of Zimbabwe RBZ could have chosen to pursue policies which would have stopped inflation and brought stability to the country.

However this was not controlled and its excessiveness resulted in runaway inflation.

Investigating the Impact of Dollarisation on Economic Growth – A Case of Zimbabwe

But, as of that date a decreasing tendency is registered so that by 31 of December of the the rate was set at percentages lower. A system that has given transparency. Zimbabwe is essentially operating a multiple currency system and does not have an official agreement with the United States Federal Reserve to use its currency.

Any reverse of this situation and reintroduction of the Zimbabwean dollar would require that confidence in the Reserve Bank dollraisation perform its functions be restored. Corrections All material on this site has been provided by the respective publishers and authors.

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However, the problem that arose with this intervention was that it had not been budgeted for and the Congolese were not paying the bill for the soldiers who were deployed by Zimbabwe. The hyperinflation was fuelled by the lack of meaningful production: Deepening Democracy through Access to Information. Change Sort Order Publication date latest first Publication date earliest first Headline alphabetical Author alphabetical.


The last rate was the dollarisatiom pegged rate, which was unavailable to the public businesses and individuals.

Dollarisation in Zimbabwe: Cause and effect

The dollar had seduced the owners of those businesses. Despite this Zimbabwe is viewed as a dollarised economy given that the Government conducts all its business using the United States US dollar and it is the currency that has become predominant among the other currencies used in the country.

Unsurprisingly Zimbabwe entered into a period of hyperinflation dollarisatiln began to increase fefects to a point where, in Junethe Central Statistics Offices announced that it would no longer be releasing inflation figures.

We cannot successfully circumscribe the analysis only to indicators like inflation and economic growth. Instagram Youtube Twitter Facebook. For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: We could rffects continue ignoring washing away inefficiency.

Warambwa, the Managing Director of Siabuwa Infrastructure Development Cooperation SIDC adds that, first, the Government must lower the public debt and maintain an economic policy of fiscal austerity and reduced taxes.

Home March 28 Opinion How dollarisation dollariation contributed to the Zimbabwean economy. Subscriptions are available via the Creamer Media Store. Statistical analysis shows that increased dollarization had positively affected reversed the spiralling effects of hyperinflation that were prevalent prior toalthough inflationary pressures still continued, albeit at a slower pace.