Chronicle Editor
Newly-appointed Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mushayavanhu presented his first monetary policy statement yesterday.
The presentation, long-delayed and keenly-awaited, has a range of notable points. The central bank will cease all quasi-fiscal activities, banks will no longer levy charges on deposits of US$100 and less, 25% of total export receipts will be surrendered to the RBZ and channelled into the market and so on.
However, the biggest highlight of his statement was his unveiling of a new currency, the ZiG, which replaces the unit we have known as the dollar since Independence in 1980.
The new currency, the Government’s sixth attempt to come up with a functioning medium of exchange since 2008, comes into circulation on Monday. It comes in 25 and 50 cent coins and 1, 2, 5, 10, 20, 50, 100 and 200 notes.
The unit will be backed by gold and other precious minerals as well as a basket of foreign currencies. It launches at 13,56 to US$1 and an interest rate set at 20%. Banks will accept the old ZWL for the next 21 days.
Dr Mushayavanhu introduced the ZiG a day after he showed President Mnangagwa the 1,5-tonne gold reserve the central bank is holding in Harare. A tonne of the precious metal is kept abroad.
In his speech yesterday, Dr Mushayavanhu said the new currency will be backed by a reserve of US$100 million, the 2,5 tonnes of gold worth US$185 million and other precious metals. There is also a reserve of ZWL$2,6 trillion which is equivalent to US$80 million.
The people have suffered over the years due to the instability of their currency. Efforts to dollarise, introduce gold coins and a weekly currency auction; clamp down on parallel market traders and blacklist Government contractors dabbling on the street market have clearly failed to resolve the currency challenge.
We, as a result, have been chasing the exchange rate all the time, with many of us choosing the “comfort” of foreign currencies instead of our own.
We had become a people without an identity, a people without a reference point. Everyone was billing in US$ and it was becoming increasingly difficult to conduct certain transactions in our national currency. That is why as high as 80 percent of all local transactions were based on the US$.
We are happy now we have the ZiG. The ZiG must work for the national good. We have no doubt that authorities applied their minds fully before introducing it. Their decision to back the new unit by physical gold reserves and other currencies is a masterstroke. We saw the vaults for ourselves on Thursday, real gold bars to fortify our currency; not some imaginary parcel.
We deserve a currency of our own. We deserve a stable currency to drive a stable, productive economy we all want. We now have the ZiG. Let us all embrace it.
Online Reporter