Zimbabwe’s Currency Crisis: Awaiting Central Bank’s Verdict

Zimbabwe’s Currency Crisis

by Motoni Olodun

Zimbabwe’s currency is in a state of flux, with citizens rushing to the safety of the US dollar as speculation mounts that an announcement from the central bank on the fate of the local unit is imminent. The Zimbabwe dollar traded at 22,476 against the greenback, marking a 73% loss this year, the world’s second-worst performance only after the Lebanese pound.

The nation is gripped by a sense of urgency after authorities brought forward the start date of the new governor, John Mushayavanhu, by a month. Reports suggest this move was made to announce a new currency plan that may include embracing the gold standard.

Zimbabwe’s unstable currency risks sending the nation back into hyperinflation, a situation it faced 15 years ago when its old local dollar had to be abandoned. The latest two Reserve Bank of Zimbabwe governors, John Mangudya and Gideon Gono, failed to bring order to the exchange rate despite multiple efforts. These included the launch of gold coins and gold-backed digital tokens under Mangudya’s watch, while Gono repeatedly slashed zeros off banknotes as hyper-inflation spiraled and topped 231 million percent in 2008.

Local media reports suggest that Mushayavanhu, who assumed office on March 28 instead of May 1 as planned, may announce the new currency policy in a monetary policy statement, which has been delayed for almost two months. The central bank has not given a date on the release of the monetary-policy statement that was originally scheduled for February but had been deferred to give policymakers time to fine-tune the currency plan.

David Mnangagwa, the country’s deputy finance minister, said last week the statement’s release was imminent, attributing volatility in the exchange rate to “anxiety and anticipation” over the policy’s delay. Meanwhile, the premium for dollars in the parallel market over official rates has widened 60% to as much Z$36,000.

Despite the current economic turmoil, Zimbabwe’s resilience and potential for recovery remain strong. The nation’s ability to navigate past crises provides hope that it can once again find a path to stability and prosperity.

Source: NewZimbabwe.com

You may also like

white logo with motto

The Zimbabwe Advocate is more than just a news outlet. We are a movement, a symbol of resistance against misinformation.

Latest News

© 2024 The Zimbabwe Advocate. All Rights Reserved.