By Business Reporter- The Reserve Bank of Zimbabwe (RBZ) has forged ahead with printing millions of ZiG notes despite stern warnings against flooding the market with valueless currency.
In an exclusive interview with The Sunday Mail, RBZ Governor Dr. John Mushayavanhu defended the production of the new currency denominations, claiming they are backed by gold, precious minerals, and foreign currency reserves, all sourced domestically.
He asserted that the central bank has generated a surplus of notes and coins, purportedly to meet market demands.
The prolonged delay in the circulation of physical notes and coins was supposedly to facilitate extensive public awareness campaigns, aiming to ensure widespread understanding and acceptance of the new currency. ZiG notes, ranging from ZiG1 to ZiG200, along with half ZiG and quarter ZiG coins, are set to gradually enter circulation.
Dr. Mushayavanhu insisted that the new currency had already been rolled out, converting all existing Zimbabwe dollar balances into ZiG as of April 5.
However, the physical introduction of notes and coins was slated for April 30, with the governor asserting that the money had already been printed and was ready for distribution.
Despite his assurances, concerns persist regarding the viability of ZiG. The central bank’s emphasis on extensive educational campaigns to familiarize the public with the currency’s features hints at potential skepticism and resistance.
Dr. Mushayavanhu’s justification that ZiG is a stable currency, purportedly gaining value since its inception, raises eyebrows given the country’s history of currency instability.
Furthermore, while Dr. Mushayavanhu touts ZiG’s stability, critics question the currency’s true value, particularly as it is pegged to the fluctuating price of gold.
The assertion that ZiG’s value hinges on gold prices raises doubts about its reliability as a medium of exchange, especially considering the volatile nature of commodity markets.
Dr. Keen Mhlanga, a prominent investment adviser, acknowledged the unique aspect of pegging ZiG to gold but cautioned that such a strategy does not guarantee currency stability.
He emphasized the need for robust mechanisms to audit currency issuance against reserves to maintain confidence in its value—a concern echoed by many skeptical observers.
The decision to introduce ZiG comes amid the rapid depreciation of the Zimbabwe dollar against major currencies, highlighting the urgent need for a stable and reliable medium of exchange.
However, doubts persist regarding whether ZiG can fulfill this role effectively, particularly given the country’s economic challenges and past currency failures.
While the RBZ boasts of sizable reserves in foreign currency and gold, questions remain about the sustainability of ZiG, especially in the absence of concrete measures to address underlying economic issues.
As Zimbabweans await the full rollout of the new currency, skepticism abounds, casting doubt on its ability to alleviate the country’s economic woes and restore confidence in its monetary system.