Zimbabwe’s central bank has pumped $190 million into the foreign-exchange market to satisfy demand for Dollars and uphold economic stability since the launch of a new gold-backed currency.
This is according to a member of the central bank’s monetary policy committee.
Zimbabwe introduced the ZiG, or Zimbabwe Gold, in April. This currency, supported by gold reserves, precious metals, and cash held by the Reserve Bank of Zimbabwe (RBZ), is considered a crucial move towards reducing the nation's dependence on Dollars by 2026.
“Initially there was not much need to intervene at the launch of ZiG. But now there has been, with the emerging volatilities, which show reduced dollarisation in the economy from 85% to 60%,” said monetary policy committee member, Persistence Gwanyanya on Monday.
As part of the strategic intervention, the central bank announced in late July that it had injected $50 million into the market to address the demand for Dollars from Zimbabwe’s lenders, Bloomberg reports.
Last week, central bank Governor John Mushayavanhu stated that the Reserve Bank is utilising foreign-exchange earnings from exporters to introduce Dollars into the market.
Since 2009, Zimbabweans have relied on US Dollars for daily expenses such as transportation, medicine, and food, following the abandonment of the national currency due to hyperinflation triggered by a failed land-reform policy that erased savings.
The ZiG represents Zimbabwe's sixth attempt in 15 years to create a stable local currency.
“Dedollarisation is happening faster than we expected. We tend to experience these challenges, so we need to manage all the pressures,” Gwanyanya said.
Furthermore, according to data posted on the central bank’s website on Monday, the ZiG is officially valued at 13.86 per Dollar. However, on the streets of Harare, the exchange rate for the greenback ranges from 16 to 26 ZiG, as reported by ZimPriceCheck.com, which monitors both official and unofficial exchange rates.
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