Photo by: Bloomberg
Zimbabwe’s banks support adopting the ZiG as the nation’s sole currency before the current target date of 2030, provided the economic stability which the bullion-backed unit has delivered is maintained.
Bankers Association of Zimbabwe President Lawrence Nyazema said the availability of the ZiG — which stands for Zimbabwe Gold — will improve as the nation boosts its foreign currency and bullion holdings.
“We committed to coming up with a roadmap which would lead us to having a mono-currency by 2030,” Nyazema said in an interview. “The pace can be expedited if we manage ZiG inflation and build reserves.”
The central bank has promised not to print more ZiG than can be backed by reserves.
President Emmerson Mnangagwa last week hinted he wants to accelerate the southern African nation’s return to just using its own currency, suggesting it could be done in the next two years. In October he extended dollar use until 2030.
Zimbabwe launched the ZiG, backed by foreign currency and 2.5 tonnes of gold, in April in its latest effort to deliver a stable local currency.
Reserves have risen to $370-million from $285-million at the unit’s launch, according to the central bank. Consumer prices month-on-month were unchanged in June, which Nyazema called “a good start.”
Information Secretary Nick Mangwana wrote in an opinion piece on Thursday that reducing reliance on the dollar is an important step toward “regaining economic sovereignty.”
Previous efforts failed amid sky-high inflation and collapsing values against the greenback, which became the currency used for 80% of all transactions.
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ZiG notes are still hard to come by and citizens with bitter memories of previous local currencies prefer to keep doing business in dollars until they’re convinced the ZiG will succeed.
The ZiG was trading at 13.76 to the dollar on Friday, according to central bank data posted on its website.