Zimbabwe’s Finance Minister Mthuli Ncube declared that the country must first access credit lines before it can adopt the ZiG as its sole currency. He pointed out the necessity of restructuring a $21 billion debt, as well as addressing significant economic challenges including a recent 43% devaluation of the new currency.
Zimbabwe’s Finance Minister Mthuli Ncube highlighted the country’s need to secure access to credit lines before fully adopting the ZiG as its main currency. He indicated that significant restructuring of the nation’s $21 billion debt is essential, as Zimbabwe has been unable to access capital markets since 1999 due to past defaults. Resolving these arrears is crucial for gaining access to balance of payments support, which is necessary for effectively managing imports and stabilizing the local currency.
The ZiG, introduced in April to replace the U.S. dollar, has experienced severe difficulties, including a marked 43% devaluation in September. This led to increased public calls for the currency’s abandonment due to its instability. To uphold the ZiG, the central bank has allocated over $400 million, in addition to implementing stricter liquidity measures to stabilize the economy.
In summary, Zimbabwe’s path to de-dollarization hinges upon addressing its significant debt obligations and regaining credit access. The recent challenges faced by the ZiG, including sharp devaluation and public skepticism, underline the complexity of transitioning to a new currency system. Without tackling these financial hurdles, the adoption of the ZiG as the nation’s only currency may not be feasible.
Original Source: news.bitcoin.com
