HARARE – A member of the Reserve Bank of Zimbabwe’s Monetary Policy Committee (MPC) has revealed that confidence in the Zimbabwe Gold (ZiG) currency, launched in April as a gold-backed stabilisation measure, has reached a record low.
The ZiG was initially pegged at ZiG13.50 to the US dollar, but it has since lost significant value, now trading at ZiG25.48 on the interbank market and around ZiG43 on the parallel market. This sharp depreciation has heightened public scepticism about the currency’s reliability.
Speaking at the Insurance Institute of Zimbabwe’s annual conference in Victoria Falls, MPC member Persistence Gwanyanya addressed the crisis, acknowledging the currency’s lack of public trust. “In our case where confidence has bottomed to a historic low, on account of hyperinflation experiences, insisting that the same confidence will drive stability is preposterous,” he stated.
The declining trust in ZiG has seen a growing number of businesses and service providers opting to transact exclusively in US dollars. Those still accepting ZiG are increasingly using parallel market exchange rates to cushion themselves against potential losses as the currency’s value continues to fluctuate.
Despite this trend, the government has maintained a strong stance on its de-dollarisation policy, with officials repeatedly affirming there is “no going back” on their commitment to revive the local currency.
In response to the crisis, Gwanyanya proposed that the government take measures to drive demand for the ZiG, which he believes is crucial to restoring public confidence. He suggested that charging taxes, duties, and other fees exclusively in ZiG would help stabilise the currency. “To deal with the rejection effect, there is a need to underwrite the ZiG through super demand,” Gwanyanya said. “The government is the best to drive the demand for ZiG through taxes, duties, statutory, and user fees.”
As the 2025 budget approaches, Treasury is expected to increasingly incorporate ZiG, a move intended to enhance confidence in the currency. However, it may also mean that the government will need to rely more heavily on foreign exchange from the surrender funds and the interbank market to meet its own currency demands.