Civil servants have begun receiving their salaries in the new ZiG currency, yet concerns persist regarding its market performance and value stability.
Minister of Finance, Economic Development and Investment Promotion, Mthuli Ncube, said civil servant salaries for April will be paid on time. He said electronic ZiG payments will be deposited into accounts on scheduled paydays.
Civil servants who spoke to CITE expressed scepticism over the new currency, saying it would also end up depreciating like the previous ZWL currency. A teacher who identified himself as Witness Moyo, said:
Firstly, hard cash in ZiG will not be available until the end of April, that is what the Reserve Bank of Zimbabwe said, now what kind of currency is that when it is unveiled, you are told there is no hard cash?
I see no difference from bearer cheques and bond notes. The only difference is the name.
We’ll just see it depreciating day in and day out. Already some outlets that belong to well-known individuals are using a rate of US$1 to ZiG18 yet they tell people they are using the bank rate.
This is the same way that happened to its predecessor ZWL notes. Another bad omen is why can’t ZiG purchase fuel.
Emmanuel Sibanda said that citizens would suffer because “businesses don’t want ZiG” as some goods such as fuel, are sold exclusively in foreign currency. He said:
Our lives will be controlled by the government as we will now have to buy at government-friendly shops that accept the ZiG.
We will not be in control of our expenditure because the value of the ZiG is determined by external factors that can ultimately lead to hyperinflation. The usual story is there is the government rate and business rate.
Minister Ncube said the Treasury will build a mechanism in anticipation of external shocks since the ZiG currency is backed by hard assets such as gold. He said:
What is happening is that our exchange rate is being driven, not just by the price of hard assets like gold but also, we take into account what we call effective exchange rate which is the inflation differentials between our country and other countries.
That inflation differential is also known as the purchasing power parity. What happens is that when there is a shock, those shocks usually show up in inflation shocks.
So, by taking into account those inflation differentials, we can take into account part of the shocks.
The Government introduced the gold-backed currency earlier this month to stabilise the economy and prevent currency devaluation like its predecessors.
