8/20/2019 Zimbabwe Case Pptx
1/16
11
Case: ZimbabweCase: Zimbabwe
descends into chaosdescends into chaos
8/20/2019 Zimbabwe Case Pptx
2/16
8/20/2019 Zimbabwe Case Pptx
3/16
33
Zimbabwe Case ( contd..)
In 2008, 80% of popu ation was be owthe po!e"t# ine ( Z$ 13 &"i ion'month( *1 )
omethin+ i e 31- bi ion Z$ pe"
nemp o#ment ( *% at end 2008)
Inte"nationa iso ation fo" man# #ea"s
8/20/2019 Zimbabwe Case Pptx
4/16
/i+hest In ation ates in the/i+hest In ation ates in thewo" d e!e"wo" d e!e"
8/20/2019 Zimbabwe Case Pptx
5/16
4uestion 14uestion 1
$hat a"e the e# e ements of count"#$hat a"e the e# e ements of count"#"is in Zimbabwe5"is in Zimbabwe5
8/20/2019 Zimbabwe Case Pptx
6/16
66
4uestion 1 ( on e# e ements4uestion 1 ( on e# e ementsof count"# "is )of count"# "is )
7isca imba ance7isca imba anceoneta"# instabi it#oneta"# instabi it#
9bsence of p"ope"t# "i+hts9bsence of p"ope"t# "i+hts;chan+e and p"ice cont"o s;chan+e and p"ice cont"o s
8/20/2019 Zimbabwe Case Pptx
7/16
--
4uestion 24uestion 2
/ow has inc"eased count"# "is/ow has inc"eased count"# "isa=ected econom# and i!in+a=ected econom# and i!in+standa"ds5standa"ds5
8/20/2019 Zimbabwe Case Pptx
8/16
88
4uestion 2 ( on the impact of4uestion 2 ( on the impact of+o!t po icies on the econom#)+o!t po icies on the econom#)
conom# has nose>di!edconom# has nose>di!ed
8/20/2019 Zimbabwe Case Pptx
9/16
4uestion 34uestion 3
@# how much is ZimbabweAs cu""enc# ,@# how much is ZimbabweAs cu""enc# ,at its oBcia "ate, o!e"!a ued "e ati!eat its oBcia "ate, o!e"!a ued "e ati!eto its b ac ma" et "ate5to its b ac ma" et "ate5
8/20/2019 Zimbabwe Case Pptx
10/16
1010
4uestion 3 ( on cu""enc#4uestion 3 ( on cu""enc#o!e"!a uation )o!e"!a uation )
ZimbabweAs cu""enc# o!e"!a ued b#ZimbabweAs cu""enc# o!e"!a ued b#nea" # se!en times, as fo ows:nea" # se!en times, as fo ows:
Cu""enc# o!e"!a uation @ ac ma" etCu""enc# o!e"!a uation @ ac ma" et"ate ' oBcia "ate 00 ' 82*"ate ' oBcia "ate 00 ' 82* 6.6- 6.6-timestimes
4uestion:4uestion:
$hat a"e the imp ications of an o!e">$hat a"e the imp ications of an o!e">!a ued cu""enc# to the count"#As!a ued cu""enc# to the count"#Aseconom#econom# 55
8/20/2019 Zimbabwe Case Pptx
11/16
8/20/2019 Zimbabwe Case Pptx
12/16
1212
4uestion *4uestion *
uppose we attempted auppose we attempted a dia+nostic owdia+nostic owcha"tcha"t e;p ainin+ the co apse ofe;p ainin+ the co apse ofZimbabweAs cu""enc#, what wou d it ooZimbabweAs cu""enc#, what wou d it oo
i e5 $e eep cu""enc# e"osion as the asti e5 $e eep cu""enc# e"osion as the ast
bo; in the ow cha"t.bo; in the ow cha"t.(1) (2) (3)
(*)"osion ofcu""enc#
!a ue
8/20/2019 Zimbabwe Case Pptx
13/16
1313
4uestion *4uestion *
&his is how the ow cha"t mi+ht oo i e: &his is how the ow cha"t mi+ht oo i e:
(1)Da"+e @ud+et
eEcits
(2)7inanced b#
p"intin+ mo"emone#
(3)?a opin+in ation
(*)"osion ofcu""enc#
!a ue
Coup e of inte"estin+ Fuestions on thene;t s ide
8/20/2019 Zimbabwe Case Pptx
14/16
4uestions4uestions1 /ow do common peop e su"!i!e in1 /ow do common peop e su"!i!e in
h#pe"in ationa"# conditions, such ash#pe"in ationa"# conditions, such asZimbabwe in the "ecent past5Zimbabwe in the "ecent past5
2 9 count"# e;pe"iencin+ h#pe">2 9 count"# e;pe"iencin+ h#pe">in ation see s #ou" ad!ice onin ation see s #ou" ad!ice onb"in+in+ in ation unde" cont"o . $hatb"in+in+ in ation unde" cont"o . $hatad!ice wou d #ou +i!e them5 Is the"ead!ice wou d #ou +i!e them5 Is the"ean#thin+ in the mac"o>economican#thin+ in the mac"o>economictoo it that mi+ht he p5too it that mi+ht he p5
1*1*
8/20/2019 Zimbabwe Case Pptx
15/16
11
Cu""enc# @oa"d
Count"#As
mone# stocin ed to its
stoc of fo"ei+n"ese"!es
7"eecon!e"tibi it# at a
E;ed "ate ofe;chan+e to theancho" cu""enc#( sa# the )
4uestions1 $hat happens if cent"a ban se s 20 bi ion f"om "ese"!es52 $ou d #ou contemp ate a simi a" s#stem fo" India5
ee ne;t s idefo" an updateon Zimbabwe
?e="# achs
8/20/2019 Zimbabwe Case Pptx
16/16
1616
9n pdate on Zimbabwe9n pdate on Zimbabwe &he"e has been some imp"o!ement in the ast th"ee #ea"s &he"e has been some imp"o!ement in the ast th"ee #ea"s
a"oundacti!e # in!o !ed in he pin+ the count"# tu"n>a"ound7o"ei+n in!estment is be+innin+ to come in. ( e+. ssa"7o"ei+n in!estment is be+innin+ to come in. ( e+. ssa"
tee has p ans to in!est in stee and coa ( about G 600tee has p ans to in!est in stee and coa ( about G 600mi ion )mi ion )