The Zimbabwean currency has fallen to another all-time low as residents sought refuge in the stability of the US dollar amid speculation the central bank is on the verge of making an announcement regarding the future of the local currency.
The Zimbabwe Dollar traded at 22.476 against the US Dollar, marking a significant decline of 73% for the year. This places it as the second-worst performing currency globally, trailing only behind the Lebanese Pound.
The nation is currently seized by a sense of urgency following the authorities' decision to advance the start date of the new governor, John Mushayavanhu, by one month.
According to local media, this move was made in anticipation of announcing a new currency plan, which may potentially involve adopting the gold standard, Bloomberg reports.
The instability of Zimbabwe's currency poses a significant risk of plunging the nation back into hyperinflation, reminiscent of the crisis experienced 15 years ago when the old local Dollar had to be abandoned.
Despite numerous efforts, the two most recent Reserve Bank of Zimbabwe governors, John Mangudya and Gideon Gono, struggled to stabilise the exchange rate. Mangudya's initiatives included the introduction of gold coins and gold-backed digital tokens, while Gono resorted to repeatedly removing zeros from banknotes as hyperinflation soared, reaching levels exceeding 231 million percent back in 2008.
"What we are seeing is anxiety and people preferring to hold US Dollars," said Lloyd Mlotshwa, head of research at IH Securities. "This signals reverting to a place of safety ahead of the currency announcement."
Last weekend, local media reported Mushayavanhu, who took office on 28th March rather than 1st May as originally planned, could unveil the new currency policy in a monetary policy statement at the end of this week, following nearly a two-month delay.
According to Zimbabwe's deputy finance minister, David Mnangagwa, the release of the statement is imminent, with the volatility in the exchange rate attributed to "anxiety and anticipation" stemming from the delay in implementing the new policy.
News you might like
Zimbabwe Dollar falls to record low ahead of currency announcement
The Zimbabwean currency has fallen to another all-time low as residents sought refuge in the stability of the US dollar amid speculation the central bank is on the verge of making an announcement regarding the future of the local currency.
posted on 03.04.2024
RBZ urges govt incentives on diaspora investments
Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ), called on the government on Monday to provide fiscal and non-fiscal incentives to diaspora investments due to their massive contribution to total foreign currency inflows in the country.
posted on 05.12.2023
Zimbabwe Dollar falls to record low ahead of currency announcement
The Zimbabwean currency has fallen to another all-time low as residents sought refuge in the stability of the US dollar amid speculation the central bank is on the verge of making an announcement regarding the future of the local currency.
posted on 03.04.2024
RBZ urges govt incentives on diaspora investments
Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ), called on the government on Monday to provide fiscal and non-fiscal incentives to diaspora investments due to their massive contribution to total foreign currency inflows in the country.
posted on 05.12.2023
Media contact
deVere Zimbabwe’s Public Relations Department deals with all areas of the media and external communications including international, national, regional, local, trade, consumer, print, broadcast, social and online. The Department aims to provide a helpful service to journalists, broadcasters and editors, amongst others, and reply to all media enquiries, including urgent enquiries out of hours, within agreed deadlines. Our press office does not have access to client details and will not be able to assist with individual client enquiries. Please contact deVere Zimbabwe’s Head of Public Relations on [email protected] or call +44 2071220925