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IMF wants Zimbabwe's gold-backed ZiG to become sole currency
11 Jun 2025 at 09:05hrs | Views
The International Monetary Fund (IMF) has expressed support for the full adoption of Zimbabwe's new currency, the Zimbabwe Gold (ZiG), as the country pushes to secure a staff-monitored program (SMP) that could unlock much-needed debt restructuring and economic reform.
The IMF's mission chief to Zimbabwe, Wojciech Maliszewski, said Monday that while the ZiG has shown promising signs of stability since its introduction in April 2024, further steps are needed for it to function effectively as a national currency. Maliszewski is leading a delegation in Harare to assess Zimbabwe's economic progress and determine whether conditions are suitable for a new SMP.
"Right now, we see good stability in the official market and we also see a convergence between the parallel and official rate," Maliszewski told reporters following a meeting with President Emmerson Mnangagwa. "Ideally, we would like to see an elimination of this gap - we would like to see one exchange rate."
The ZiG, introduced as a successor to the embattled Zimbabwean dollar, is the country's sixth currency attempt since the 2009 collapse of the original local dollar. Despite being backed by gold reserves and introduced to restore monetary credibility, it has struggled to gain full public confidence. Many Zimbabweans continue to favor the US dollar, partly due to the ZiG's inconvertibility and a recent 43% devaluation aimed at narrowing the official-parallel market exchange rate gap.
On Tuesday, the ZiG traded largely unchanged at 26.96 against the US dollar on the official market, while on the parallel market it exchanged at between 32 and 35 per dollar - a sign that gaps still persist despite efforts to stabilize.
Maliszewski emphasized that the IMF is not advocating for further depreciation of the currency, but rather for policies that promote rate convergence through sound fiscal management and a deepening of the foreign exchange market.
"There is a good chance that these rates will converge," he said. "What we want to see is a market-based mechanism, not artificial price controls."
The successful implementation of an SMP is seen as a crucial step toward Zimbabwe resolving its $21 billion external debt burden. Creditors are demanding evidence of fiscal discipline and monetary reform before any debt restructuring or arrears clearance can proceed.
Finance and Economic Development Minister Mthuli Ncube recently said at the African Development Bank's annual meetings that the government expects to finalize the SMP by the end of June.
If approved, the SMP would not only guide Zimbabwe toward sustainable economic recovery but also enhance its credibility with international lenders after previous programs were derailed - most notably in 2019, when the central bank resorted to unbacked money printing.
The IMF team is expected to conclude its current mission in the coming weeks, with recommendations likely to shape Zimbabwe's next steps toward economic normalization.
The IMF's mission chief to Zimbabwe, Wojciech Maliszewski, said Monday that while the ZiG has shown promising signs of stability since its introduction in April 2024, further steps are needed for it to function effectively as a national currency. Maliszewski is leading a delegation in Harare to assess Zimbabwe's economic progress and determine whether conditions are suitable for a new SMP.
"Right now, we see good stability in the official market and we also see a convergence between the parallel and official rate," Maliszewski told reporters following a meeting with President Emmerson Mnangagwa. "Ideally, we would like to see an elimination of this gap - we would like to see one exchange rate."
The ZiG, introduced as a successor to the embattled Zimbabwean dollar, is the country's sixth currency attempt since the 2009 collapse of the original local dollar. Despite being backed by gold reserves and introduced to restore monetary credibility, it has struggled to gain full public confidence. Many Zimbabweans continue to favor the US dollar, partly due to the ZiG's inconvertibility and a recent 43% devaluation aimed at narrowing the official-parallel market exchange rate gap.
On Tuesday, the ZiG traded largely unchanged at 26.96 against the US dollar on the official market, while on the parallel market it exchanged at between 32 and 35 per dollar - a sign that gaps still persist despite efforts to stabilize.
"There is a good chance that these rates will converge," he said. "What we want to see is a market-based mechanism, not artificial price controls."
The successful implementation of an SMP is seen as a crucial step toward Zimbabwe resolving its $21 billion external debt burden. Creditors are demanding evidence of fiscal discipline and monetary reform before any debt restructuring or arrears clearance can proceed.
Finance and Economic Development Minister Mthuli Ncube recently said at the African Development Bank's annual meetings that the government expects to finalize the SMP by the end of June.
If approved, the SMP would not only guide Zimbabwe toward sustainable economic recovery but also enhance its credibility with international lenders after previous programs were derailed - most notably in 2019, when the central bank resorted to unbacked money printing.
The IMF team is expected to conclude its current mission in the coming weeks, with recommendations likely to shape Zimbabwe's next steps toward economic normalization.
Source - moneyweb
