Major companies, including an airline, have completed the necessary technical procedures that allow them to accept payments in ZiG, with Reserve Bank Governor Dr John Mushayavanhu assuring Parliament yesterday that the central bank has sufficient reserves to support the new currency.
ZiG continues to demonstrate its viability as the preferred tender of exchange with more industry players now accepting the new local currency in exchange for goods and services.
In a business update, Fastjet Airlines said customers can now book and pay for flights using local currency.
“Fastjet Zimbabwe is pleased to announce that we have successfully migrated to the ZiG currency.
“Customers can now book and pay using ZiG. Payments using ZiG can only be made at any Fastjet airport ticket office or Fastjet sales stores,” the airline said.
In an interview yesterday, Confederation of Zimbabwe Industries (CZI) president, Mr Koray Machesa, said the show of confidence in ZiG across all sectors was proof that the country was on the right path.
“We welcome this show of confidence and hope it spreads to all sectors of the economy.
“As we have noticed, some companies are accepting ZiG, which shows that trust is growing, so we hope there will be more and more trust in ZiG over the coming months and years,” he said.
Machesa said the increase in confidence will undoubtedly see reliance on the US dollar reduced as the use of the local currency gains momentum.
“If you remember the Reserve Bank Governor’s speech, he said he would be happy if the use of the US dollar fell by the end of the year from levels that may now be 70 percent or less, so hopefully that target will be achieved.
“Well, the market will tell us, and as we observe, these small steps that we are seeing now show that there is confidence. In general, any economy needs to have its own currency, so any country should have its own currency, and I don’t think there is any debate.” about that.
Confederation of Zimbabwe Retailers (CZR) president Dr Denford Mutashu said current indications were that ZiG use would increase once the notes and coins were introduced on Tuesday next week.
“The market has embraced ZiG and the joy will double once the notes and coins start trading as people cannot wait.
“ZiG will be a sustainable currency because it is backed by gold, a precious metal whose value can only increase if its value decreases,” he said.
Mutashu said 50% of all temporary corporate tax payments will be made in local currency, thus increasing demand for them.
“We are working closely with the government and are quite satisfied that we share the same interests of currency stability, exchange rate and inflation.
“Fifty percent of the QPDs will be paid in ZiG and all major companies will go after ZiG. Creating demand and space for ZiG is one way to achieve stability,” he said.
Service providers and supermarket chains across the country are enjoying brisk business due to the continued growth of trust in ZiG.
Yesterday at a joint session of the Governor’s Committees on Budget, Finance, Economic Development, Investment Promotion, Industry and Trade, Dr. Mushayavanhu said that the central bank has sufficient reserves to support the new currency.
Reserve Bank Z has US$100 million in cash and nostro balances and US$185 million worth of gold, he said. “This is enough to stabilize the currency, and in the future, the government will also buy the surrender clause of 25 percent from exporters, and 25 percent, half of that, 50 percent, will be sold back to the market through the banks. Banks must ensure that there is liquidity of cash.” Foreign exchange is in the market so that any importer or anyone who wants to buy something from outside the country can access foreign exchange from his or her bank.
“So, I can assure you, honorable members, that we have sufficient reserves to support ZiG,” Dr. Moshayavanhu said.
He said that the value of the local currency will be determined by market forces through the concept of a seller willing to buy.
He added: “The exchange rate will be determined by market forces. However, the central bank will only intervene in the market if the exchange rate falls very quickly or rises very quickly, just as any other central bank in the world does.”
Dr. Mushayavanhu added that they have established a monetary policy implementation committee to track variables such as money supply, inflation and productivity to ensure that the central bank adheres to the issues it has announced in monetary policy.
He said the value of ZiG is likely to rise due to an expected increase in demand when companies make their quarterly tax payments in June, with half of those payments to be made in ZiG.
Dr Moshayavanhu also told the committees that they consulted widely in arriving at the ZiG.
“His Excellency the President told me that I will become Governor of the Federal Reserve Bank on September 11, 2023. I began preparing for this mission and conducting consultations.
“My new team and I have consulted widely. As I said before, we have consulted the CZI, the Chamber of Mines, other business organisations, civil society, we have consulted opinion leaders, and we have even requested assistance from advisers from multilateral organizations who have been generously seconded to us.
He said, “I heard that people said yesterday (Monday) that we obtained the structured currency that we provided from the World Bank. This is not true.
“We had a consultant loaned to us by the World Bank who helped us get more information about structured currency and improve our ideas about that currency.” Announce
