Prominent businessman Tawanda Nyambirai has urged the Reserve Bank of Zimbabwe (RBZ) to clarify the recent sharp devaluation of the Zimbabwe Gold (ZiG) currency. On September 27, the central bank reduced the value of the ZiG by over 40%, adjusting the exchange rate from 14.1 ZiG per US dollar to 24.3 ZiG.
In a post on X, Nyambirai expressed concerns that the devaluation, without an explanation of the expected relationship between the ZiG and rising gold prices, undermines confidence in the currency. He remarked that this situation raises doubts about the RBZ’s credibility and suggests that the currency may be based on misleading claims. He stated:
The ZiG is supposed to be anchored on gold. Since its introduction, gold prices have increased significantly, while the ZiG has declined. An official devaluation without clarifying the correlation raises more questions than answers and completely undermines trust in the ZiG.”
When the ZiG was launched on April 5, 2024, RBZ Governor John Mushayavanhu claimed it would be supported by foreign currencies, gold, and precious minerals. He asserted that the bank held 1.1 tonnes of solid gold and nearly 1.5 tonnes stored abroad, along with $100 million in cash and precious minerals, totaling reserves valued at $285 million—more than three times the amount issued in ZiG currency.
Following the devaluation, the RBZ also raised its policy rate to address ongoing pressure on the ZiG. This marks Zimbabwe’s sixth attempt to establish a stable currency in 15 years, following a history of hyperinflation under former President Robert Mugabe.
Independent economist Hapi Zengeni highlighted the RBZ’s lack of clarity regarding whether the currency will float freely or if the bank will continue to control the exchange rate. She noted the challenges posed by the disparity between the official exchange rate and the parallel market, complicating trade, investment, and consumer behavior in Zimbabwe.
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