Zimbabwe forex reserves
Hard-hitting opinion and analysis. Alarmist opinion about the early return of the Zimdollar is rearing its head again.
Russia Foreign Exchange Reserves | | Data | Chart | Calendar
This is despite the central bank authorities reassuring the public they will only be able to reintroduce it once they have enough foreign exchange forex or gold reserves to back it.
Forex reserves are deposits of foreign currency held by the central bank of a country, while gold reserves refer to a quantity of gold held to support the issue of currency.
However, the local dollar will definitely bounce back at some point in future and hence there should be proper contingency plans and sufficient resources for its safe return. One of the most important suggestions put forward by economic and financial experts is for the Reserve Bank of Zimbabwe to consider building gold reserves to diversify its holdings in the run-up to the reintroduction of the local dollar. At a time when a number of central banks are boosting their gold stocks due to its status as a safe haven amid geopolitical concerns and economic headwinds, it boggles the mind why Zimbabwe has not followed the same route.
Rather, it appears much joy is derived from seeing more of the yellow metal being commercially mined for the purposes of export, ignoring the fact that its property as a store of value can also be taken advantage of to buttress the local currency. On the other hand, gold is a haven for investors who seek to avoid currency risk; hence its value always appreciates in times of crisis.
Nonetheless, the same should apply with forex reserves.
Zimbabwe Reserves of foreign exchange and gold - Economy
In times of crisis, foreign exchange reserves have proved to be useful in absorbing the misery related to economic and currency meltdown. Investors also have more confidence or are willing to put their money in countries that have strong foreign exchange reserves and stable currencies.
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