Professor Steve Hanke ranks Zimbabwe’s ZiG currency as the second worst worldwide, losing 50% of its value against the US dollar in 10 months. The currency trades at ZiG33-ZiG40 on the black market, with poor compliance to the official rate contributing to its instability. The RBZ aims to stabilize the currency amid criticism regarding its use in essential purchases.
Professor Steve Hanke, an internationally recognized economist, has ranked Zimbabwe’s ZiG currency as the second worst globally, just after Venezuela’s Bolivar. His recent analysis reveals that the ZiG has depreciated by 50% against the US dollar in the last 10 months, driven largely by inflationary pressures.
The Bolivar has experienced a 52% loss, while the Iranian Rial and Ethiopian Birr have seen declines of 24%. Initially valued at US$1 to ZiG2.50 last year, the currency now fluctuates between ZiG33 and ZiG40 on the black market. This significant depreciation is attributed to waning trust in the purported ‘gold-backed currency.’
In Zimbabwe’s informal economy, compliance with the government’s mandated exchange rate of US$1 to ZiG26 is minimal, contributing to the currency’s instability. Hanke’s analysis coincides with recent assurances from the Reserve Bank of Zimbabwe (RBZ), which has stated its commitment to stabilizing the ZiG and ensuring its success.
The RBZ has faced criticism over its inability to mandate the use of the ZiG for essential transactions, such as fuel purchases and passport fees. During a recent meeting with the Tourism Business Council of Zimbabwe (TBCZ), RBZ Governor Dr. John Mushayavanhu commented, “There are adequate use case scenarios for ZiG at the moment.”
In summary, Zimbabwe’s ZiG currency ranks as the second worst globally, suffering a 50% depreciation against the US dollar over the past year. This decline is rooted in inflation and a lack of trust in the currency. Compliance with the official exchange rate remains low, and the RBZ has emphasized its commitment to stabilizing the ZiG, despite ongoing instability in essential transactions.
Original Source: www.newzimbabwe.com
