The Reserve Bank of Zimbabwe (RBZ) is making significant strides towards establishing the Zimbabwe Gold (ZiG) as a fully independent currency. Deputy Governor Innocent Matshe announced the bank’s intention to secure an International Organisation for Standardisation (ISO) code for ZiG, highlighting a major move in Zimbabwe’s monetary policy. This announcement came during a breakfast meeting with the Zimbabwe Economics Society in Harare, where Matshe outlined the strategic measures aimed at stabilizing and gaining trust in ZiG.
ISO currency codes are pivotal in global finance, acting as unique identifiers that enhance the efficiency of international transactions. By applying for such a code, RBZ aims to facilitate the wider use of ZiG in international dealings, marking a critical step in its acceptance as a stand-alone currency.
Matshe emphasized that the success of ZiG hinges on a robust economic framework, which includes maintaining a tight monetary policy, controlling the money supply, and fostering demand for the domestic currency. “This approach is intended to demonstrate policy consistency and build trust in ZiG, ensuring it is recognized as a standalone entity in the financial world,” Matshe explained.
Despite past economic challenges, such as currency fluctuations, exchange rates, and inflation, Matshe noted that Zimbabwe’s economy has continued to grow. However, he acknowledged the urgent need to address these persistent issues by shifting towards digital economic solutions. This transition aims to alleviate cash flow problems and expand the reach of financial services beyond traditional banking systems.
“The introduction of ZiG was primarily to stabilize the economy and standardize our currency system. For substantial economic growth, we need to implement robust reforms that not only cater to traditional sectors but also integrate digital finance essential for today’s economic environment,” Matshe stated.
Digitalization, according to Matshe, is key to achieving a 21st-century economy. He argued that certainty and stability, especially during crises, are crucial for long-term planning and investment, which are necessary for sustainable industrialization.
Addressing concerns about foreign currency availability, Matshe reassured that there is sufficient foreign reserve to meet legitimate demands, provided there is proper documentation like invoices. He also highlighted the controlled introduction of the new currency into the economy to prevent overwhelming the market and to combat the dominance of the parallel market, which drives approximately 80% of the country’s economic activities.
The deputy governor assured that the banking system has been adequately supplied with small denominations to ease the initial cash shortage. “As the currency becomes more accessible to the general public, we expect the cash shortages to resolve, leading to a more stable exchange rate that truly reflects the economy’s value and enhances the purchasing power of ZiG,” Matshe concluded.
