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Zimbabwe working on its currency convertibility

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Zimbabwe's newly introduced gold coin is pictured in Harare, Zimbabwe, July 25, 2022. The Reserve Bank of Zimbabwe Governor John Mangudya on Monday unveiled gold coins that are expected to act as a store of value and reduce the demand for U.S. dollars as the country battles to control soaring inflation. (Photo by Shaun Jusa/Xinhua)
Zimbabwe's newly introduced gold coin is pictured in Harare, Zimbabwe, July 25, 2022. The Reserve Bank of Zimbabwe Governor John Mangudya on Monday unveiled gold coins that are expected to act as a store of value and reduce the demand for U.S. dollars as the country battles to control soaring inflation. (Photo by Shaun Jusa/Xinhua)

Zimbabwean Finance Minister Mthuli Ncube said on Thursday that the country will work on ensuring that the new gold-backed currency, the Zimbabwe Gold (ZiG), becomes convertible.

He said the government and monetary authorities were working on closing possible loopholes that can be used by speculators to destabilize the currency, noting that medium-to-long-term stability of the new currency is an important stepping stone toward the convertibility of the new currency.

“We are already dealing with people who are trading the ZiG on the parallel market; it is money laundering. We should not give speculators an opportunity to destabilize our currency,” he said while responding to questions at the start of a two-day hybrid investment summit on Zimbabwe that is underway in South Africa.

“We are also looking at the convertibility of the currency in the future. We want to promote the ZiG so that anyone around the globe can hold it and be able to exchange it for gold or the U.S. dollar equivalent,” Ncube said.

Zimbabwe launched the ZiG in April, which is backed by the central bank’s reserves comprising 100 million U.S. dollars in foreign currency and 185 million U.S. dollars worth of gold.

The ZiG notes and coins started circulating on Tuesday, several weeks after the electronic ZiG was unveiled.

The ZiG, Zimbabwe’s sixth attempt at a currency solution, is expected to stabilize the economy and help tame inflation.

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