Thursday, January 21, 2010

Zimbabwe's Central Bank on the Verge of Collapse

The Zimbabwe central bank, which is no longer printing money, is near bankruptcy.

Zimbabwean economist Nsununguli Mbongolwane told Voice of America that the bank was insolvent as its liabilities far outstrip its assets and it can no longer meet its obligations.

Under the former government of President Robert Mugabe, the bank often, to the benefit of the former ruling ZANU-PF party and its supporters, printed vast quantities of the now-abandoned Zimbabwean dollar.

If the Federal Reserve stopped printing money, they would be in the same position. Their recent announcement of profits was only possible because of the money they redirected to the sectors where they held securities.

1 comment:

  1. isn't the zimbabwe CB bankrupt because it owes money in a foreign currency? o.w. why can't they just print up some zimbabwe dollars and call it even.