Following the recent introduction of the Zimbabwe Gold (ZiG) currency, the Reserve Bank of Zimbabwe (RBZ) has stepped forward to address key inquiries regarding its implementation and potential impact on the economy.
Last Friday, RBZ unveiled the ZiG currency, described as a “structured currency” backed by gold and foreign reserves. This move aims to combat Zimbabwe’s persistent inflation woes and stabilize its struggling economy, which has faced significant challenges in recent years.
Among the questions raised by the public was whether ZiG could be utilized for purchasing fuel, a critical commodity in Zimbabwe’s economic landscape. In response, the central bank clarified that ZiG would not be immediately accepted for buying diesel and petrol. The current pricing mechanism, denominated in USD, will remain in place until further review. However, RBZ expressed its commitment to collaborating with the government to encourage the fuel sector to adopt ZiG for transactions in the future.
“The current pricing mechanism in the fuel sector will remain in place until otherwise reviewed. As Reserve Bank and Government work towards wider use of ZiG, the fuel sector will be encouraged to accept ZiG for fuel purchases,” explained the RBZ.
Furthermore, questions were raised regarding the international recognition and usability of ZiG for cross-border transactions. The RBZ clarified that ZiG is not yet recognized internationally and cannot be utilized for international payments due to its current lack of convertibility. However, the central bank acknowledged ZiG’s nascent stage and outlined plans to strengthen the currency to achieve full convertibility in the future, aligning with regional macroeconomic convergence objectives under the SADC Protocol on Finance and Investment.
“ZiG is a local currency that has just been launched and has not yet achieved convertibility. The Bank will work to strengthen the currency to attain full convertibility, consistent with the regional agenda for macroeconomic convergence under the SADC Protocol on Finance and Investment,” the RBZ explained.
