I will provide an update if ZiG doesn’t succeed,” stated the RBZ governor

Date: 18 April 2024

ZimTimes Staff

The Reserve Bank of Zimbabwe’s governor, John Mashayavanhu, expressed his commitment to keeping the public informed about the success of the newly introduced Zimbabwe Gold (ZiG) currency. He made this declaration while elucidating the monetary policy statement at the Zimbabwe International Trade Fair in Bulawayo. The event, organized by Alpha Media Holdings (AMH), gathered industry leaders and stakeholders.

“I utilize a dashboard to assess our progress status. In case of deviation, I’ll reconduct consultations and seek input from stakeholders to address issues and explore solutions for improvement.”

The introduction of the ZiG marked the replacement of the Zimdollar, which had been greatly impacted by hyperinflation, resulting in a rise in living expenses. ZiG notes and coins are scheduled to be released on April 30th.

ZiG currency in both notes and coins will be introduced by April 30th. According to Mushayavanhu, individuals in the fuel industry will need to pay their debts using ZiG, aiming to stimulate demand and enhance trust.

We possess ample protection for ZiG. The majority of transactions occur in foreign currency, constituting 80%, with the remaining 20% in local currency. He emphasized that the exchange rate of ZiG will be determined by market forces.

Mushayavanhu stated that the government planned to eliminate the 10% surcharge imposed by businesses on the interbank rate, as it was driving up the prices of goods and services in the domestic currency.

He mentioned that fuel industry participants would rush to acquire ZiG to cover 50% of their local currency payments during quarterly payment dates (QPDs). The upcoming QPD in June requires businesses to settle 25% of their yearly tax obligations.

Mushayavanhu stated that this measure would compel fuel operators to embrace ZiG in order to fulfill their tax responsibilities. He cautioned stakeholders against being deceived by currency speculators who are already manipulating the ZiG exchange rate.

“We came to understand that we were in competition with more robust currencies, leading to the Zimdollar’s decline due to our lack of gold reserves,” he explained. Mushayavanhu mentioned that the central bank is in talks with the Zimbabwe Revenue Authority, as their systems are not yet equipped to accept ZiG as a payment method.

He stressed the importance of prioritizing local transactions within ZiG while keeping the US dollar reserved for international commitments.

The government addressed the challenging hyperinflation in 2009 by replacing the Zimbabwe dollar with a mix of foreign currencies, primarily the US dollar, resulting in the economy’s dollarization.

After the devaluation of savings due to inflation, the government formed a committee led by retired Justice George Smith to probe the scale of value decline during the hyperinflation era. The investigation affirmed significant loss of value and proposed compensation for those affected.

Due to the absence of pension inflation adjustments and currency devaluation, certain retirees received no value from their pensions. This resulted in many hardworking individuals facing financial hardship after years of dedication.