The Reserve Bank of Zimbabwe is confident in the gold-backed ZiG currency as a viable alternative to the US dollar, implementing strict monetary policies to ensure its stability and market acceptance. The goal is to achieve a de-dollarized economy by 2030, with businesses allowed to set independent exchange rates to foster confidence in the local currency.
The Reserve Bank of Zimbabwe (RBZ) is optimistic about the effectiveness of the gold-backed Zimbabwe Gold (ZiG) currency, presenting it as a solid alternative to the United States dollar for the local economy. During a recent Tourism Business Council of Zimbabwe (TBCZ) meeting, RBZ Governor John Mushayavanhu defended the currency’s stability, stating, “The ZiG to USD rate is firming up,” underscoring the bank’s commitment to strengthening local currency confidence.
Launched in April 2023, the ZiG aims to mitigate Zimbabwe’s ongoing exchange rate fluctuations and inflation challenges. The RBZ has adopted stringent monetary policies, including elevated interest rates, to deter speculative borrowing and stabilize the currency. Governor Mushayavanhu reaffirmed that the long-term vision is to accomplish a full de-dollarization of the economy by 2030, acknowledging the US dollar’s unsustainable dominance due to its adverse effects on local industries and monetary regulation.
To facilitate wider acceptance of the ZiG, the RBZ has permitted businesses to establish their own exchange rates, deviating from the rigid official rates. The Financial Intelligence Unit (FIU) will not impose penalties on companies utilizing independent rates, as long as they maintain reasonable pricing margins. Additionally, some fuel traders have approached the RBZ with intentions to sell fuel in ZiG for local financing, indicating evolving acceptance of this new currency.
RBZ Deputy Governor Innocent Matshe indicated that a market-driven exchange rate might stabilize at approximately US$1/ZiG22, which authorities believe the market will gradually embrace. As Zimbabwe transitions its currency system, the central bank remains dedicated to ensuring the resilience of the ZiG while aiming for reduced reliance on the US dollar.
In conclusion, the Reserve Bank of Zimbabwe is proactively promoting the gold-backed ZiG currency, aiming to establish it as a reliable alternative to the US dollar. Through strict monetary policies and increased flexibility in exchange rates for businesses, the RBZ seeks to enhance the currency’s market acceptance and stability. The long-term goal of de-dollarization underscores the bank’s commitment to revitalizing Zimbabwe’s economy and fostering independent monetary control.
Original Source: bulawayo24.com
