By Enyichukwu Enemanna
President Emmerson Mnangagwa on Wednesday vowed to implement corrective measures to protect the finances of his countrymen after the new gold-backed currency slipped on the black market five months after it was launched.
“We note with concern the resurgence of the parallel market activities driven by speculative tendencies. Corrective measures are being instituted to protect Zimbabweans from disruptions,” Mnangagwa said in an address to the parliament.
The Zimbabwe Gold (ZIG) was devalued 43% last Friday after it lost nearly 47% value on the black market.
Since the devaluation, the ZiG has again weakened from Friday’s rate of 24.3902 to 25.2824 on Wednesday, while on the black market it has slipped to 32 per U.S. dollar.
Mnangagwa said the devaluation of the ZiG will allow “greater flexibility” and encourage people holding forex to trade on the official market.
“Government remains committed to backing the currency through setting aside 50% of royalties to build reserves,” he said.
The ZiG is Zimbabwe’s sixth attempt to stabilize local currency in 15 years after a bout of hyperinflation under former longtime leader Robert Mugabe.
The Bankers Association of Zimbabwe after a meeting with central bank officials on Wednesday said last week’s move would cause price hikes and weaken confidence.
Heritage Times HT reports that the ZiG notes and coins began circulating early May, marking a significant step in the country’s monetary reform to curb inflation.
The Reserve Bank of Zimbabwe (RBZ), the country’s central bank, introduced the new currency on April 5, replacing the inflation-ravaged Zimbabwean dollar.
