News / National
Gold reserves backing ZiG rise
10 Oct 2024 at 18:50hrs | Views
The Reserve Bank of Zimbabwe (RBZ) has reassured the public of continued exchange rate stability, with gold reserves backing the Zimbabwe Gold (ZiG) currency now valued at over US$450 million, up from US$375 million in June this year.
This announcement comes amid concerns over the recent adjustment in the ZiG exchange rate. On September 27, the rate shifted from Zig14 per US$1 to around Zig25 per US$1, sparking debate over the currency's long-term stability and its ability to support Zimbabwe's economic needs.
RBZ Governor Dr. John Mushayavanhu addressed these concerns on Thursday, telling ZBC News that the exchange rate movement should not be seen as a devaluation but rather as a market response to current economic conditions.
"What happened cannot be described as a devaluation. It was simply a reflection of what was happening on the ground, where parallel markets and various sectors, including retail, were setting their own rates," said Mushayavanhu.
He assured that the central bank has put in place mechanisms to stabilize the domestic currency and does not anticipate any further significant changes in the exchange rate.
"As the central bank, we are committed to ensuring economic stability and supporting growth. As of yesterday, we had ZiG10.7 billion in deposits, and our foreign reserves stood at US$450 million," he stated.
Dr. Mushayavanhu also highlighted the distinction between a currency being backed by gold and being linked to gold prices.
"Our currency is backed by gold and other precious metals, as well as foreign currency reserves held with the Federal Reserve. There is a difference between a currency being backed by gold and being linked to the price of gold," he clarified.
The RBZ's commitment to bolstering the ZiG's strength reflects its broader goal of facilitating economic growth while maintaining a stable currency for Zimbabwe's market needs.
This announcement comes amid concerns over the recent adjustment in the ZiG exchange rate. On September 27, the rate shifted from Zig14 per US$1 to around Zig25 per US$1, sparking debate over the currency's long-term stability and its ability to support Zimbabwe's economic needs.
RBZ Governor Dr. John Mushayavanhu addressed these concerns on Thursday, telling ZBC News that the exchange rate movement should not be seen as a devaluation but rather as a market response to current economic conditions.
"What happened cannot be described as a devaluation. It was simply a reflection of what was happening on the ground, where parallel markets and various sectors, including retail, were setting their own rates," said Mushayavanhu.
He assured that the central bank has put in place mechanisms to stabilize the domestic currency and does not anticipate any further significant changes in the exchange rate.
"As the central bank, we are committed to ensuring economic stability and supporting growth. As of yesterday, we had ZiG10.7 billion in deposits, and our foreign reserves stood at US$450 million," he stated.
Dr. Mushayavanhu also highlighted the distinction between a currency being backed by gold and being linked to gold prices.
"Our currency is backed by gold and other precious metals, as well as foreign currency reserves held with the Federal Reserve. There is a difference between a currency being backed by gold and being linked to the price of gold," he clarified.
The RBZ's commitment to bolstering the ZiG's strength reflects its broader goal of facilitating economic growth while maintaining a stable currency for Zimbabwe's market needs.
Source - zbcnews
