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Zimbabwe’s ZiG primed for seamless international acceptance and usage

Persistence Gwanyanya
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HARARE – Zimbabwe’s newly introduced currency, Zimbabwe Gold (ZiG), is anticipated to gain widespread acceptance locally, paving the way for regional acceptance, according to Monetary Policy Committee member, Mr. Persistence Gwanyanya.

Launched in April, ZiG is part of a series of policy measures aimed at stabilizing the nation’s economy. These interventions are designed to address exchange rate volatility, curb inflation, and restore macroeconomic stability. Backed by precious minerals, mainly gold, and foreign currency, ZiG symbolizes a significant shift in Zimbabwe’s monetary policy.

“Zimbabwe Gold is poised to be a game-changer in our economy,” Gwanyanya remarked. “Its acceptance within our borders is crucial and will likely lead to broader acceptance across the region, enhancing economic integration.”

ZiG is underpinned by substantial reserves, including 2.5 tonnes of gold and US$300 million in cash. Specifically, 1.5 tonnes of gold are stored in the Reserve Bank of Zimbabwe (RBZ) vaults, while an additional tonne is held offshore. These reserves ensure that ZiG is a stable and reliable form of currency, bolstering confidence among local and potential regional users.

The introduction of ZiG comes at a critical time for Zimbabwe, which has faced significant economic challenges in recent years. Hyperinflation and a lack of confidence in the local currency have plagued the economy, prompting the need for innovative solutions.

Economists and policymakers see the launch of ZiG as a strategic move to stabilize the economy. By anchoring the currency to gold, the government aims to prevent the hyperinflation that has previously undermined the local currency.

“Backing ZiG with gold and foreign currency reserves is a prudent approach,” said Dr. John Mangudya, Governor of the Reserve Bank of Zimbabwe. “It provides a tangible asset base that supports the currency’s value, thereby enhancing its credibility and acceptance.”

The successful adoption of ZiG locally is expected to have positive ripple effects regionally. Zimbabwe’s economic stability is crucial for Southern Africa, given the interconnectedness of the region’s economies. A stable Zimbabwean currency could facilitate smoother trade relations and economic collaborations within the Southern African Development Community (SADC).

“The potential for regional acceptance of ZiG is high, provided it proves effective in stabilizing Zimbabwe’s economy,” noted Dr. Godfrey Kanyenze, a renowned Zimbabwean economist. “A stable and reliable currency in Zimbabwe could boost investor confidence and enhance economic activities within the region.”

As ZiG gains traction, the focus will be on its impact on the broader economy. The government is optimistic that this new currency will help to achieve its economic goals and lay a foundation for sustainable growth.

“The introduction of ZiG is not just a monetary policy measure; it’s a critical step towards economic transformation,” said Finance Minister Mthuli Ncube. “We are confident that with strong backing and proper management, ZiG will play a pivotal role in our journey towards economic stability and growth.”

For more detailed insights into Zimbabwe’s economic reforms and the introduction of Zimbabwe Gold (ZiG), visit The Chronicle.