The Reserve Bank of Zimbabwe (RBZ) is confident in the gold-backed Zimbabwe Gold (ZiG) currency as a viable alternative to the US dollar. Introduced in April 2023, the RBZ has implemented strict monetary policies to stabilize the currency while aiming for a mono-currency system by 2030. Businesses can set their own exchange rates, and fuel traders are encouraged to accept ZiG for transactions.
The Reserve Bank of Zimbabwe (RBZ) is optimistic regarding the prospects of the gold-backed Zimbabwe Gold (ZiG) currency as a strong alternative to the United States dollar for the local economy. During a recent event held by the Tourism Business Council of Zimbabwe (TBCZ), RBZ Governor John Mushayavanhu expressed confidence in the stability ensured by the monetary policy measures the bank has put in place.
Introduced in April 2023, the ZiG aims to combat chronic exchange rate instability and inflation. The RBZ has adopted a strict monetary policy, featuring high-interest rates, to prevent speculative borrowing and stabilize the currency. Mushayavanhu highlighted the importance of strengthening local confidence in the ZiG, with the goal of eventually de-dollarizing the economy and achieving a mono-currency system by 2030.
To facilitate greater acceptance of the ZiG in the market, the RBZ has empowered businesses to establish their own exchange rates rather than strictly following the official rate. Additionally, the Financial Intelligence Unit (FIU) will not penalize businesses that utilize independent exchange rates as long as they maintain reasonable pricing margins.
Mushayavanhu also mentioned that certain fuel traders have approached the RBZ to sell fuel in ZiG, which could support their local operations. He expressed confidence that more traders will choose to accept ZiG for fuel transactions, emphasizing a commitment to avoid fuel shortages and long queues in the market.
RBZ Deputy Governor Innocent Matshe indicated that a sustainable exchange rate based on economic fundamentals should be approximately US$1/ZiG22, which authorities anticipate the market will gradually adopt. As Zimbabwe undergoes this currency transition, the RBZ is dedicated to ensuring the resilience of the ZiG while aiming for reduced reliance on the US dollar.
In summary, the Reserve Bank of Zimbabwe is taking significant steps to bolster the gold-backed Zimbabwe Gold (ZiG) currency as a stable alternative to the US dollar. By implementing strict monetary policies, allowing flexible exchange rates, and promoting market acceptance, the RBZ aims to achieve a de-dollarized economy by 2030. With central bank officials expressing optimism, the future of the ZiG appears to be a critical focus for Zimbabwe’s economic stability.
Original Source: bulawayo24.com
