Business Reporter
A RESERVE Bank of Zimbabwe (RBZ) monetary policy committee member has admitted that confidence in the six-month-old Zimbabwe Gold (ZiG) currency has bottomed to a historic low.
He made the remarks this week while addressing insurance stakeholders in during a high level conference.
“In our case where confidence has bottomed to historic low, on account of hyperinflation experiences insisting that the same confidence will drive stability is preposterous,” Gwanyanya said during the Insurance Institute of Zimbabwe annual Conference in Victoria Falls.
Some service providers are now demanding to be paid for their products exclusively in US dollars to hedge against potential losses.
Government has insisted that there is no going back on de-dollarisation.
Gwanyanya, however, said there was a need to boost confidence in the ZiG to ensure it is not demonetised like previous local currencies.
He said this could be done by ensuring that government prices its services exclusively in the local currency.
“To deal with the rejection effect, there is a need to underwrite the ZiG through supper demand,” he said.
“Robust use case, established around wider options for the ZiG is necessary. Government is the best to drive the demand for ZiG through taxes, duties, statutory and user fees.
“We expect Treasury to increasingly pivot towards ZiG the 2025 budget. Increased appetite for ZiG by the government is seen as a confidence boosting measure, but it also means the government has to increasingly rely on the surrender funds/interbank market for its forex requirements.”
Finance minister Mthuli Ncube has said the 2025 budget will be anchored on boosting the ZiG.
