New currency greeted with pessimism
society to develop sustainable solutions that will benefit the entire nation,” it said.
“We will continue to monitor developments related to the ZiG currency and will work tirelessly to ensure that the voices of ordinary Zimbabweans are heard, and their concerns addressed,” the statement reads in part.
“We reiterate that what Zimbabweans need is not just a new currency, but a fundamental shift towards a more inclusive and equitable economy.
“Only through genuine reform and commitment to the well-being of all citizens can we truly build a prosperous future for Zimbabwe.”
However, economist Prosper Chitambara expressed optimism that the new currency will succeed.
“Well, the new monetary policy has introduced several positive monetary policy measures, namely the adoption of a market-determined exchange rate system,” Chitambara said.
“I think this is also in line with recommendations from international partners, such as the International Monetary Fund.
“So, I think that's an important development. Themarket to play a greater role in terms of determining the exchange rate.
“Market dynamic forces of demand and supply must have greater sway in terms of foreign exchange rate determination that also helps to boost confidence in the whole foreign exchange management system.”
He also noted that the reduction of the bank policy rates is another positive move that will reduce the cost of borrowing for businesses.
“The central bank has also recalibrated and reduced the bank policy rate from a high of 130% per annum to 20% per annum.
“That's also a positive development in that it will reduce the cost of borrowing money, and the cost of accessing credit, which should boost several businesses.
“There are also alleviating bank charges. I think that's also a positive development, which should help to support formal financial sector intermediation.”
Chitambara said the introduction of a new currency was a bold move that needed the governor to limit the government’s access to statutory credit for it to be sustainable.
“But the most important highlight is the introduction of the new currency, the so-called structured currency, the ZiG, which is effectively replacing the Zimbabwe dollar,” he said.
“That's an important development.
“The sustainability of this new currency obviously will be a function or will be determined by several factors, which include the strict adherence by the central government to statutory limits in terms of access to credit by the government,” he said.
He added: “Also ensuring that the quantum of the reserve money is to be fully baked by the equivalent gold and foreign exchange reserves.
“I think there will also be the need for greater transparency in that respect, especially around the quantum of the reserve that we saw during the handover, how the central bank opened up its vaults to the public.
“I think that's an important confidence-boosting measure. But there's a need for periodic updates.”
He urged the reserve bank to have quarterly reports in terms of how much reserves the nation has.
He said this would go a long way in terms of ensuring confidence in the new currency.