x Abu Dhabi, UAESunday 23 July 2017

Return to gold standard was a glint in Mugabe-Qaddafi eyes

White-ruled Rhodesia switched from the British pound in 1970, introducing the Rhodesian dollar, at an exchange rate of $0.71:US$1. Ever since, Zimbabwe, as the country is now known, has kept its own currency.

White-ruled Rhodesia switched from the British pound in 1970, introducing the Rhodesian dollar, at an exchange rate of $0.71:US$1. Ever since, Zimbabwe, as the country is now known, has kept its own currency.

At the time of independence in 1980 the local currency remained stronger than the greenback. The rate was 68 Zimbabwe cents to the US dollar. The currency gradually declined after 1980 until its dramatic crash on November 17, 1997, after an unbudgeted $4 billion outlay to pay former members of the guerrilla movements that helped to end white rule.

In 2006 the government effectively confiscated all foreign-exchange holdings, and forced its creditors to accept payments in Zimbabwean dollars.

The idea of introducing a gold-backed currency seems to appeal to Robert Mugabe, the president. He raised the possibility of a regional gold-supported currency with the late Libyan leader Muammar Qaddafi in 2009.

Qaddafi wanted a common gold currency for the entire African continent, while Mr Mugabe proposed that African Union member states should introduce the gold standard money individually. The idea never caught on with other African countries, and quietly faded away.

 

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