Zimbabwe, buffeted by economic turmoil for over two decades
now, has the highest inflation and one of the lowest valued currency units in
the world.
Well-informed sources told The NewsHawks that outgoing
Reserve Bank of Zimbabwe (RBZ) governor John Mangudya — officially replaced by
his successor John Mushayavanhu yesterday — will launch the new currency after
Easter holidays at the end of the week – almost certainly on Friday.
Mangudya will launch
the currency with Mushayavanhu playing a prominent role in the process as the
incoming governor tasked to defend that new unit, while fighting inflation.
The RBZ, banker and advisor to government, is responsible
for formulation and implementation of monetary policy to ensure low and stable
inflation levels, while protecting the value of the currency.
A source said: “The new currency will be launched at the
end of the week after the Easter holidays — on Friday. It was supposed to have
been launched much earlier in the year when the monetary policy statement was
due in January or February, but it was delayed. Then 28 March was set as the
new date, but there were still certain things that were not yet in place. So
next week is the new date. Its value will be determined by the value of the
ZiG, an RBZ gold-backed token.
“The official
appointment and the role of Mushayavanhu was also an issue. Prior to that there
were issues of gold and United States dollar reserves accumulation which were
supposed to be in place before its announcement. One of the functions of the
RBZ is management of the country’s gold and foreign exchange assets. This was a
key process is coming up with the structured currency.”
Zimbabwe is battling the double whammy of currency
volatility and inflation. Currency volatility occurs when there are rapid
changes to the exchange rate of a currency in a short period of time.
Political and economic conditions have a considerable
bearing on the exchange rate, thus its fluctuations. Inflation, both cost-pull
and demand-pull, and foreign currency market operations also have an impact on
the exchange rate.
Contacted for comment, Mangudya said the delay in
delivering the monetary policy statement was necessitated by the need to
finalise arrangements to ensure that the structured currency is well-supported
to sustain exchange rate and price stability.
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