Friday 17 May 2024


Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mushayavanhu has predicted a huge demand for ZiG by June when 50% of the Quarterly Payment Date (QPD) will be paid in local currency.

He said the demand for ZiG will be so dire that even owners of fuel service stations shall be looking for it.

Dr Mushayavanhu was speaking at the ZNCC organised Monetary Policy Statement and Structured Currency review breakfast meeting held at a local hotel in Masvingo recently.

He advised companies that are not accepting the ZiG currency that a time will come when they will need the local currency to settle their tax obligations.

“There has been talk that if ZiG cannot buy fuel, a passport and so forth then why should people want to have it? We are in a multi-currency arrangement.

“Government has said from June all QPD payments are going to be made 50% in ZiG. That step was taken in an effort to increase demand for ZiG because one problem that we identified before we came up with a Monetary Policy statement was that there was no demand for ZiG whatsoever.

“What that is going to do is that come June there is going to be a huge demand for ZiG,” he said.

He said there is US$90 million worth of ZiG in circulation and the amount is less than US$150 million worth of ZiG which will be required for the 50% of QPD.

“I am saying this to forewarn people that you may be the owner of a fuel garage in Masvingo and only sell your fuel in US$, its fine but you are also going to pay tax in June, where are you going to get the ZiG? You are better off selling some fuel in ZiG so that come June you have ZiG in place,” he said.

The current environment is that transactions are done 80% in US$ and 20% in ZiG.

Dr Mushayavanhu said he will ensure that the gold backed currency remains stable through monitoring the amount of ZiG in circulation against the amount of reserves.

“We are starting with 2,5 tonnes of gold worth US$185 million, we also have US$100 million in our bank account versus US$90 million plus or minus worth of ZiG currency in circulation. We are more than 3 times covered and that should be a good start. We have learnt from the past that any further increase in amount of ZiG in circulation has got to be met by the increase of reserves.

“The President has directed that any royalties paid by mining companies will be paid in kind to the Central Bank and used to build up reserves for the Central Bank and this is how we built the 2, 5 tonnes. When we buy foreign currency from exporters, who are required to surrender 25% of it in exchange for ZiG, half of the money is sold back into the market and the other half, is split into two, 50 % goes to Government to meet Government’s commitments in foreign exchange and the other 50% is used to build reserves of the Central Bank. Over time we will be building reserves,” said Dr Mushayavanhu.

He added that they are going to make sure that every year, the reserves in the form of gold, US$ balances are audited and the results will be made public.

“On a daily basis, we are monitoring the movement in amount of money in circulation. We have introduced the governor’s daily dash board, where every day at 4pm I get an update on the amount of money in circulation, reserves and exchange rate and if anything is moving in the wrong direction, we quickly act so that it’s corrected,” he added.

He said as the currency maintains its stability, banks will start to offer mortgages and medium term financing. Masvingo Mirror


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