The former finance minister of Zimbabwe, Tendai Biti, has cautioned President Emmerson Mnangagwa‘s administration against abandoning the US dollar for an alternative currency as they consider joining BRICS. Biti warns that de-dollarisation could have negative consequences for the country.
BRICS is a bloc of emerging economies including Brazil, Russia, India, China, and South Africa. Zimbabwe has applied for BRICS membership, which recently accepted six oil-producing nations.
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Biti argues that Zimbabwe lacks the necessary conditions to transition away from the US dollar and warns that such a move could lead to economic disaster. BRICS aims to challenge the dominance of the US dollar by introducing a gold-backed international reserve currency. Biti said:
The regime is intent on de-dollarization. This move will be an absolute disaster and will cost workers and pensioners.
Conditions for de-dollarisation don’t exist.
Move is a zany attempt to follow the global de-dollarization agenda being pursued by BRICS and other new world order advocates.
Zimbabwe currently relies on a multi-currency system, with the US dollar being the preferred choice due to a fragile and volatile domestic currency. The Zimbabwean dollar has faced challenges such as inflation, corruption, and a lack of investor confidence in the ZANU PF-led administration. Financial analysts anticipate a significant depreciation of the local currency, both in the official exchange rate and on the black market, when the government releases its outstanding payments to contractors. This is expected to have an immediate impact on the value of the Zimbabwean dollar.