Zimbabwe implements de-dollarization roadmap
Date
8/12/2024 6:42:34 AM
(MENAFN) Zimbabwe has officially adopted a strategic roadmap to shift from its reliance on the United States dollar to the newly introduced gold-backed ZiG currency, marking a significant step in its efforts to stabilize its economy. The announcement was made by Information Minister Jenfan Muswere during a media briefing on Tuesday, following a recent cabinet meeting in the capital, Harare.
The de-dollarization roadmap outlines a structured plan to integrate the ZiG, or Zimb Gold, as the primary legal tender in Zimbabwe's economy. This transition aims to reduce the country's dependency on the United States dollar, which currently accounts for approximately 70 percent of all economic transactions, according to Bloomberg, citing data from the central bank.
The introduction of the ZiG in April represents Zimbabwe’s latest attempt to address its prolonged currency crisis, which has persisted for over a decade. Prior to the launch of the ZiG, the Zimbabwean dollar had experienced continuous depreciation against the United States dollar throughout the year. The ZiG initiative is supported by 2.5 tons of gold and USD100 million in foreign currency reserves, a move intended to instill confidence and stabilize the local currency.
The International Monetary Fund (IMF) noted in a late June press release that the ZiG's official exchange rate has remained stable, marking a respite from the macroeconomic instability that had plagued Harare earlier in the year. This stability is seen as a positive development in Zimbabwe's ongoing efforts to revive its economy and manage currency fluctuations.
President Emmerson Mnangagwa has expressed optimism about the new currency, suggesting that ZiG could potentially become Zimbabwe’s sole legal tender by 2026, ahead of the initially projected 2030 deadline. This ambitious timeline reflects the government's commitment to achieving a more stable and resilient economic environment through the adoption of its gold-backed currency.
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