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Zimbabwe may scrap US$ for local transactions without notice
21 hrs ago | Views
The government has warned that it may scrap the United States dollar for local transactions without notice in a bid to enforce acceptance of the Zimbabwe Gold (ZiG) currency.
The ZiG was introduced in April last year to replace bond notes, which had become worthless due to inflation. At the time, retailers and other service providers were rejecting bond notes and opting to price their goods and services in United States dollars.
Upon its introduction, the ZiG was pegged at 13.50 to the US dollar. However, it has struggled to maintain stability, with some traders refusing to accept it due to fears of financial losses reminiscent of 2009, when Zimbabwe abandoned the Zimdollar and dollarised.
Justice Minister Ziyambi Ziyambi on Wednesday stated that the government was working on eliminating the United States dollar in favor of exclusive use of the local currency, a move that could be implemented without prior notice.
Addressing legislators in Parliament, Ziyambi emphasized the need to prioritize the ZiG and build internal confidence in its value.
"What we are working out is to remove foreign currencies like Mr. Trump's currency, whereby tomorrow, he might wake up and say Trump first," Ziyambi warned. "As a country, we want to use our local currency, which is what we want to internalise."
The Justice Minister urged Zimbabweans to accept the ZiG as the national currency of choice.
"What is important is not to have the view that our money does not work. Nothing else is needed. If you believe that our money works, you are good, you are correct. That is the measure," he said.
Last September, authorities were forced to devalue the ZiG from 1:13.99 to 1:24.39 due to its instability. Some businesses have already shifted away from reporting their financial results in the local currency, opting instead for the US dollar.
Economic analysts have raised concerns that the ZiG may face the same fate as its predecessors - the Zimdollar, RTGS dollar, and bond notes - all of which were scrapped due to volatility.
At its launch, the Reserve Bank of Zimbabwe claimed that the ZiG was backed by gold and other minerals. However, skepticism remains over its ability to maintain long-term stability.
Zimbabwe has been experimenting with various currency systems since the abandonment of the Zimdollar in 2009 due to hyperinflation. The latest warning from the government signals a possible shift towards a fully local currency-based economy, a move that could have significant economic ramifications.
The ZiG was introduced in April last year to replace bond notes, which had become worthless due to inflation. At the time, retailers and other service providers were rejecting bond notes and opting to price their goods and services in United States dollars.
Upon its introduction, the ZiG was pegged at 13.50 to the US dollar. However, it has struggled to maintain stability, with some traders refusing to accept it due to fears of financial losses reminiscent of 2009, when Zimbabwe abandoned the Zimdollar and dollarised.
Justice Minister Ziyambi Ziyambi on Wednesday stated that the government was working on eliminating the United States dollar in favor of exclusive use of the local currency, a move that could be implemented without prior notice.
Addressing legislators in Parliament, Ziyambi emphasized the need to prioritize the ZiG and build internal confidence in its value.
"What we are working out is to remove foreign currencies like Mr. Trump's currency, whereby tomorrow, he might wake up and say Trump first," Ziyambi warned. "As a country, we want to use our local currency, which is what we want to internalise."
"What is important is not to have the view that our money does not work. Nothing else is needed. If you believe that our money works, you are good, you are correct. That is the measure," he said.
Last September, authorities were forced to devalue the ZiG from 1:13.99 to 1:24.39 due to its instability. Some businesses have already shifted away from reporting their financial results in the local currency, opting instead for the US dollar.
Economic analysts have raised concerns that the ZiG may face the same fate as its predecessors - the Zimdollar, RTGS dollar, and bond notes - all of which were scrapped due to volatility.
At its launch, the Reserve Bank of Zimbabwe claimed that the ZiG was backed by gold and other minerals. However, skepticism remains over its ability to maintain long-term stability.
Zimbabwe has been experimenting with various currency systems since the abandonment of the Zimdollar in 2009 due to hyperinflation. The latest warning from the government signals a possible shift towards a fully local currency-based economy, a move that could have significant economic ramifications.
Source - newsday
