ZiG performance pleases RBZ, private sector leaders

Private sector leaders and the Reserve Bank of Zimbabwe (RBZ) have praised the performance of Zimbabwe's structured currency, the Zimbabwe Gold (ZiG), citing its stability and positive impact on price predictability and inflation control. Global financial institutions like the African Development Bank (AfDB) have also commended the introduction of the ZiG, which is backed by gold and foreign currency reserves.

At the Zimbabwe National Chamber of Commerce (ZNCC) 2024 congress in Victoria Falls, representatives from the government, RBZ, and private sector expressed satisfaction with ZiG's impact on the economy and encouraged Zimbabweans to trust the currency.

Dr. Steven Moyo from the RBZ highlighted the bank's commitment to maintaining robust liquidity measures and promoting the wide acceptance of ZiG. The RBZ aims to ensure the currency's stability by keeping liquidity within set targets and supporting its use in government transactions.

The RBZ has focused on addressing challenges related to currency change and maintaining a tight monetary stance to prevent excess liquidity. The government and the RBZ are dedicated to ensuring ZiG's stability, which has already led to decreased parallel market activity and more predictable pricing.

The positive impact of ZiG on inflation was noted, with annual inflation dropping to -2.4% in May 2024, indicating disinflation and price corrections. The goal is to make ZiG the preferred currency for domestic transactions, while the US dollar remains for foreign transactions.

Professor Ashok Chakravarti, special advisor to the Ministry of Finance, emphasized the need to build confidence in ZiG over time. He explained that past inflation and exchange rate issues were due to uncontrolled money supply growth, which has now been addressed through structured currency measures.

The AfDB's principal country economist, Kelvin Banda, supported ZiG, noting its necessity and positive outcomes, such as reduced inflation. ZNCC's outgoing president, Mike Kamungeremu, appreciated the RBZ's commitment to not printing excess money and encouraged continued consultation with stakeholders before implementing new measures.

The congress concluded with optimism about ZiG's future, emphasizing the importance of building and maintaining confidence in the structured currency to support Zimbabwe's economic stability and growth.