The government has announced plans to implement new measures aimed at addressing systemic issues in the financial market that are contributing to the depreciation of the value of gold in Zimbabwe (ZiG).
The price of ZiG has dropped on the black market, trading at a staggering $1.24.
Interim President Constantino Chiwenga has announced that the government will implement new measures to address systemic gaps in the financial market that are contributing to the devaluation of the local currency (ZIG).
Chiwenga urgently called on Zimbabweans to adopt their local currency, as many businesses have begun to reject it. This reluctance has led to soaring prices of goods and commodities, making life more difficult for citizens.
Speaking at the funeral of Brigadier (retd) Shadrick Ndabambi at the National Heroes Monument in Harare on Wednesday, interim President Chiwenga indicated that the government would introduce measures to curb arbitrage in the foreign exchange market.
“Let me assure you that the government is working to promote wider use of our local currency and is putting in place measures that will eliminate loopholes that create arbitrage opportunities in the foreign exchange market,” Chiwenga added.
“The government will continue to monitor the operations of our financial markets and enhance efforts to develop and stabilize our national currency,” he added.
Chiwenga appealed to Zimbabweans to rally behind the local currency, which has been largely rejected by private companies. “No country will develop without sovereign control, defence and growth of its national currency,” he said. “Our government has introduced Zimbabwe gold as a new sovereign currency.”
“It is our responsibility as a nation to embrace and protect the new currency as the foundation and anchor of our economic development.”
Renowned economist Professor Gift Mugano has said the country’s monetary situation might have been different if the central bank and government had listened to his advice.
“The government has advised that demand for ZiG should be created by allowing all government services including passports, fuel, taxes etc. to be paid in ZiG so that people are convinced to keep it. But the government is the first entity to reject its own money. It does not want ZiG in fuel and passports, so the market follows suit.
Secondly, I advised that the currency cannot be backed by 2.5 tons of gold. You need at least $4.5 billion. The reserves were not enough, which is why the ZiG index fell.
Third, there is no confidence in the market. No confidence in the currency. Zanu PF should not kid itself. It needs the opposition to get things done. Toxic politics is affecting the economy. We need each other.”
In April, the central bank launched ZiG, following the collapse of RTGs. Just five months later, the new coin fell dramatically, hitting an all-time low of $1.24. At the time of its launch, ZiG was trading at $1.13.50.
