Zimbabwe’s currency hit yet another record low amid a surge in demand for the dollar, reports indicate.
The Zimbabwe dollar experienced a significant decline, trading at 22,476 against the US dollar, marking a 73% loss for the year [2024]. This places it as the world’s second-worst performing currency, trailing only behind the Lebanese Pound.
The nation is said to be gripped by a sense of urgency, especially after authorities advanced the start date of the new governor, John Mushayavanhu, by a month. Local media reports suggest that this move was made in anticipation of announcing a new currency plan, which may involve adopting the gold standard.
Since its re-introduction in 2019, after being abandoned a decade earlier due to hyperinflation, the Zimbabwean authorities have made several attempts to stabilize the Zimbabwe dollar. These efforts have included initiatives such as introducing gold coins and digital tokens backed by bullion, known as ZiG, which was introduced as a means of exchange in October 2023.
🇿🇼 LAUNCH | Zimbabwe Introduces the ZiG Gold-Backed Digital Currency for Use as a ‘Means of Payment for Domestic Transactions’
The gold-backed digital tokens, held in either e-gold wallets or e-gold cards, will be tradable and capable of facilitating person-to-person (P2P) and… pic.twitter.com/ikgAyFMad1
— BitKE (@BitcoinKE) October 10, 2023
As reported by BitKE in February 2024, Finance Minister, Mthuli Ncube, revealed that the country was considering backing its currency with gold to end exchange rate instability.
“In order to manage growth of liquidity, we may link the exchange rate to a hard asset such as gold,” the minister said in an online press briefing held to announce a conference of African ministers that Zimbabwe will host at the end of this month [February 2024].
🇿🇼
AFRICAN CURRENCY | Zimbabwe Considering Backing Currency with Gold to End Exchange Rate Instability 🇿🇼The Zimbabwean dollar has experienced a significant depreciation, declining nearly 50% against the US dollar since the beginning of the year [2024].
This follows a… pic.twitter.com/PXDEf3IPZ2
— BitKE (@BitcoinKE) February 15, 2024
According to reports, Mushayavanhu, who assumed office on March 28 2024 instead of May 1 2024 as planned, may announce at the end of this week the new currency policy in a monetary policy statement, which has been delayed for almost two months.
The central bank has yet to announce a specific date for the release of the monetary policy statement. Initially scheduled for February2024, it was postponed to allow policymakers ample time to refine the currency plan.
David Mnangagwa, Zimbabwe’s deputy finance minister, stated last week that the release of the statement was imminent. He attributed the volatility in the exchange rate to ‘anxiety and anticipation’ surrounding the delay in the policy’s release.
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