Connect with us

Hi, what are you looking for?

Zimbabwe News

RBZ Governor explains decline in ZiG currency value amid isring gold prices

zig1

Dr. John Mushayavanhu, the Governor of the Reserve Bank of Zimbabwe (RBZ), recently addressed concerns regarding the decline in value of the Zimbabwe Gold (ZiG) currency, which was introduced in April. Despite rising global gold prices, the ZiG has experienced a significant devaluation, dropping 44% from 13.99 to 24.39 per US dollar.

In an interview with a local paper, Dr. Mushayavanhu clarified that the ZiG currency is intrinsically linked to both gold prices and inflation rates in Zimbabwe and the United States. While global gold prices have risen, high inflation rates in Zimbabwe have adversely affected the currency’s value.

“The underlying value of the structured currency (ZiG) is designed to mimic the movement in the prices of reserve assets backing it and the inflation differentials,” he explained. This mechanism is intended to reflect the fluctuations in Zimbabwe’s reserve assets, such as gold, alongside the inflation disparities between the ZiG and the US dollar.

Dr. Mushayavanhu noted that although the gold price has firmed, rising inflation in Zimbabwe has offset any gains. He highlighted recent inflation figures, with month-on-month inflation at 1.4% in August 2024 and 5.8% in September 2024, which have contributed to the currency’s depreciation.

He elaborated on the necessity for a price discovery mechanism, which allows the exchange rate for the ZiG to adjust according to current economic conditions. This adjustment aims to mitigate the effects of excess liquidity in the economy, helping to anchor inflation expectations and minimize inflation differentials in the future.

“The movement in the exchange rate is expected to play a critical shock-absorbing role on the prevailing excess liquidity, ensuring the currency remains aligned with macroeconomic dynamics,” Dr. Mushayavanhu concluded. As Zimbabwe navigates these economic challenges, the RBZ continues to emphasize the importance of adapting monetary policy to stabilize the ZiG and support the nation’s financial framework.

In other news – Tytie and Kikie reveal plans to relocate to Dubai

Zimbabwean content creators Tytie and Kikie have shared thrilling news with their followers, they are relocating to Dubai! After spending time in South Africa, the couple is eager to embark on this new adventure in the vibrant city of Dubai, marking their first visit to the UAE. In a heartfelt message, Tytie and Kikie expressed their excitement about the move, emphasizing how it represents a fresh start and new opportunities.

The couple has been actively saving for Kikie’s dream car. Still, in a remarkable show of commitment to their future, they decided to redirect those funds toward their relocation expenses. Read More

Comments

You May Also Like

Zimbabwe News

Starlink has officially launched its satellite internet service in Zimbabwe as of September 7, defying earlier plans that involved a contentious partnership with IMC...

Zimbabwe News

Sonja Madzikanda, the estranged wife of flamboyant businessman Wicknell Chivayo, has recently stirred interest by discussing both the potential for rekindling her marriage and...

Zim Celebs

Zimdancehall artist Ras Pompy has become the focus of an unexpected scandal that erupted online this Thursday. The controversy involves accusations that Ras Pompy...

Zim Celebs

Zimdancehall artist Ras Pompy has been thrust into the spotlight for an unexpected scandal involving his friend’s mother. The revelation emerged during the attempted...

Advertisement