Zimbabwe’s new currency is facing pressure just five months after its introduction, as increased grain imports deplete foreign reserves, jeopardizing the government’s goal to make it the sole currency by 2026.
The gold-backed Zimbabwe Gold (ZiG), the country’s sixth attempt at a stable currency in 15 years, was launched in April at 13.6 ZiG per U.S. dollar, but it has since lost nearly 80% of its value on the black market.
Economist Prosper Chitambara pointed out that the currency’s devaluation signals a lack of public trust, as locals have been slow to adopt it.
However, Persistence Gwanyanya, a member of the Reserve Bank of Zimbabwe’s Monetary Policy Committee, emphasized that it is too early to consider the currency a failure.
He suggested that increasing the use of ZiG could involve the government raising taxes in the local currency and intervening by boosting foreign currency reserves.
Market traders remain skeptical about the ZiG.
“The currency keeps losing value, so it doesn’t make sense for business to use it. I don’t trust the ZiG. We’ve experienced this with the Zimdollar before,” said Maynard Maketo, a street vendor selling candy and phone recharge cards.
Pricecheck, a platform tracking exchange rates, reports the ZiG trading at 20 to 26 ZiG per U.S. dollar on the black market, while the official rate is 13.9 ZiG to $1.
Carol Munjoma, who sells groceries in Harare, deals only in U.S. dollars. “Where I purchase my supplies, they don’t accept the ZiG. To protect my business, I charge in dollars. The ZiG needs to stabilize before it’s accepted here,” she explained.
Central Bank head John Mushayavanhu, in July, reassured Reuters that the government remains committed to building trust in the new currency. Gwanyanya shared this sentiment, stating, “It’s too soon to say the ZiG is failing.”
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