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'Zimbabweans will stampede for ZiG by June'

by Staff reporter
18 May 2024 at 19:50hrs | Views
Reserve Bank of Zimbabwe (RBZ) Governor, Dr. John Mushayavanhu has highlighted the impending surge in demand for the Zimbabwean dollar (ZiG) anticipated to occur by June.

This surge is expected to coincide with the implementation of a policy mandating that 50% of Quarterly Payment Date (QPD) settlements be made using the local currency.

Speaking at a Monetary Policy Statement and Structured Currency review breakfast meeting organized by the Zimbabwe National Chamber of Commerce (ZNCC) in Masvingo, Dr. Mushayavanhu emphasized the necessity for businesses to prepare for this shift in payment dynamics.

The Governor underscored the strategic intent behind the policy adjustment, noting the historical lack of demand for the Zimbabwean dollar. By stipulating that a significant portion of QPD payments must be settled in ZiG, the government aims to stimulate demand for the currency. Dr. Mushayavanhu cautioned businesses against disregarding the impending requirement, particularly in light of their tax obligations. As tax payments become increasingly denominated in ZiG, businesses not accommodating the local currency in their transactions risk encountering liquidity challenges.

Currently, the majority of transactions in Zimbabwe are conducted in US dollars, with ZiG accounting for a minority share. Dr. Mushayavanhu outlined the mechanisms employed to ensure the stability of the gold-backed currency. These include meticulous monitoring of ZiG circulation relative to reserves and strategic interventions to bolster reserves through various channels, such as royalties from mining companies and foreign currency transactions.

Furthermore, the Governor emphasized the commitment to transparency and accountability in managing the currency regime. Regular audits of reserves, including gold holdings and US dollar balances, will be conducted, with results made publicly available. Additionally, the implementation of a daily monitoring system, the governor's daily dashboard, enables prompt identification and rectification of any deviations in currency circulation, reserves, or exchange rates.

Looking ahead, Dr. Mushayavanhu outlined the potential implications of currency stability, including the facilitation of mortgage and medium-term financing by banks. This indicates a broader vision for economic growth and financial inclusion facilitated by a robust and stable currency framework.

In conclusion, the Governor's remarks underscore the strategic imperatives guiding Zimbabwe's currency policy, emphasizing the need for businesses to adapt to evolving payment dynamics and the government's commitment to ensuring the stability and integrity of the financial system.

Source - Masvingo Mirror
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