The International Monetary Fund (IMF) welcomed Zimbabwe’s introduction of a new gold-backed currency, the ZiG, as an important step.
In an emailed response to Bloomberg questions, a spokesperson for the IMF said:
The introduction of ZiG represents an important policy action accompanied by several complementary policy changes — including monetary, exchange rate, and fiscal policy measures.
The IMF spokesperson also said that the lender will send a team to Zimbabwe in late June and this “will be an opportunity to discuss and look at the performance of the new currency arrangement”.
ZiG was launched on 05 April 2024, becoming Zimbabwe’s sixth attempt in the last 15 years to establish a functioning currency after previous efforts failed.
The Reserve Bank of Zimbabwe said it will not print any more ZiG unless they are backed by reserves and also pledged not to finance government spending by printing money.
Since the ZiG’s launch, the central bank has reset its benchmark interest rate to 20% from 130%.
The RBZ’s Financial Intelligence Unit (FIU) and the police have launched a crackdown on illegal money changers and also threatened to fine anyone not trading in the ZiG at the official exchange rate.
However, the central bank’s Deputy Governor Innocent Matshe told Bloomberg that while there’s been enforcement, market forces will determine the ZiG’s value. He said:
We don’t depend on enforcement. We want the currency to find itself in the market as it should and build its reputation. It has managed to hold its value steadily.
On Thursday, the ZiG reached its highest level against the United States dollar, touching 13.21 per dollar, which is 2.6% above where it began trading on April 8.
