Zimbabwe’s Reserve Bank has devalued its gold-backed currency, the ZiG, by 43% and raised the benchmark interest rate to 35% from 20% amid skepticism over the currency’s viability.
The central bank’s website showed the ZiG trading at 24.4 per U.S. dollar, down from 14 per dollar earlier in the day.
While the central bank did not explicitly confirm the devaluation, Governor John Mushayavanhu announced measures to increase exchange rate flexibility and address inflation.
Monthly inflation surged to 5.8% in September from 1.4% in August, reflecting pressures on the ZiG due to rising food import prices and declining dollar revenues from mineral exports.
The ZiG, introduced in April as a gold-backed currency to replace the Zimbabwean dollar, has faced skepticism due to the country’s history of failed local currencies.
Also Read: Zimbabwe Begins Trading in Gold Backed Currency
Previous experiments with local currencies led to hyperinflation and a shift to the U.S. dollar.
The central bank has pledged not to print more ZiG than its reserves allow but analysts warn that the currency will struggle without addressing Zimbabwe’s deeper economic issues, including limited access to global capital markets and ongoing sanctions.
Other measures announced include raising reserve requirements on deposits and capping foreign currency withdrawals.
I conceive this web site has got some very wonderful info for everyone : D.
I’d should check with you here. Which isn’t one thing I often do! I get pleasure from reading a post that will make people think. Additionally, thanks for permitting me to remark!
Youre so cool! I dont suppose Ive read something like this before. So nice to seek out any individual with some original thoughts on this subject. realy thank you for beginning this up. this web site is one thing that is wanted on the net, somebody with slightly originality. useful job for bringing one thing new to the web!
The next time I read a blog, I hope that it doesnt disappoint me as much as this one. I mean, I know it was my choice to read, but I actually thought youd have something interesting to say. All I hear is a bunch of whining about something that you could fix if you werent too busy looking for attention.