Zimbabwe’s President Emmerson Mnangagwa pledged on Wednesday (2) to implement corrective measures to protect the population’s incomes after the country’s new gold-backed currency fell into the black market five months after its introduction.
ZiG, short for Zimbabwe Gold, was devalued by 43% last Friday (27), after losing almost 47% in the black market.
“We note with concern the resurgence of activities in the parallel market, driven by speculative trends. Corrective measures are being put in place to protect the people of Zimbabwe from disturbances,” Mnangagwa said in a speech before parliament.
Since the devaluation, the currency has weakened again, going from 24.3902 on Friday (27 September) to 25.2824 on Wednesday (2 October), while in the black market it fell to 32 per US dollar.
The government said that the devaluation of ZiG will allow “greater flexibility” and encourage holders of foreign exchange to trade in the official market.
“The government remains committed to supporting the currency, reserving 50% of taxes for reserve building,” said Emmerson Mnangagwa.
ZiG is the Southern African country’s sixth attempt to create a stable currency in 15 years, following a period of hyperinflation under the long-term former leader Robert Mugabe.
Following a meeting with central bank officials, the Zimbabwe Bankers’ Association said on Wednesday (2 October) that last week’s move would cause price increases and weaken confidence.
Source: Reuters
