Zimbabwe Is In The Grips Of A Death Spiral - Steve Hanke

Renowned economist, Steve Hanke yesterday said Zimbabwe was of the brink of a death spiral. Using microblogging site Twitter, Professor Hanke quoted Mthuli Ncube’s Tweet that said the exchange rate of the Zimbabwe Dollar to United States Dollar is way undervalued. Hanke then said Mthuli Ncube was delusional: 

#Zimbabwe‘s Finance Minister Prof. @MthuliNcube is totally delusional. His calculation of the real exchange rate is utter rubbish. Clear evidence that Zimbabwe is in the grips of a death spiral.

#Zimbabwe‘s Finance Minister Prof. @MthuliNcube is totally delusional. His calculation of the real exchange rate is utter rubbish. Clear evidence that Zimbabwe is in the grips of a death spiral. https://t.co/Ji1oGIE2EP

— Prof. Steve Hanke (@steve_hanke) September 22, 2019

Mthuli earlier in the day yesterday had given a theoretical explanation of the exchange rate in a tweet a move that was met by sour responses from some Zimbabweans.

The exchange rate of the #Zimbabwe Dollar to United States Dollar is way undervalued. The exchange rate of Zim$ to US$ should be around 6 at the moment, on the basis of the real exchange rate (RER) relative to the South African Rand. pic.twitter.com/vUWBvA9aXN

— Prof. Mthuli Ncube (@MthuliNcube) September 22, 2019

Hanke’s comments on Zimbabwe’s finance minister’s utterances came a few days after the country saw a surge in black-market exchange rates a move which prompted the RBZ to swoop in swiftly and freeze accounts of companies they said were responsible for the exchange rate running away. 

Source Twitter.