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Friday, July 12, 2024

Analysts impressed by RBZ currency management approach

Story by Owen Mandovha, Business Reporter

THE ZiG currency has significantly outperformed market expectations since its introduction in April this year, with analysts concurring Zimbabwe is on a path to secure a functionally strong currency.

In a post monetary policy review in April this year, Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu told captains of industry to check on him regarding the performance of the new ZiG currency.

Dr Mushayavanhu said a tight monetary framework, Central Bank independence and the no-pursuance of quasi-fiscal activities, will anchor the gold backed new currency from any fluctuations associated with past local currencies.

Analysts say the stellar performance of the ZiG currency has so far garnered confidence in the market, with its purchasing power surprising naysayers.

Economic analyst, Mr Malone Gwadu said, “It is a fantastic run of the ZiG currency so far and it speaks to the promises which were done by the new Governor that he will reign in money creation and also not dabble into quasi fiscal activities. The currency has so far been widely accepted by big business and many stakeholders and its strength speaks to how effective the new measures are.”

“So far so good and that gives confidence to market players. The new currency is working well and what there is need to sustain this stance for the long haul,” said Zimbabwe National Chamber of Commerce’s chief executive officer, Mr Christopher Mugaga.

CEO Africa Roundtable chief executive officer, Mr Kipson Gundani and economist Titus Mukove concur monetary chiefs at Number 80 Samora Machel Avenue should assume a backseat role and let effective policy measures do the talking.

“There is obviously a semblance of predictably of the currency and it gives business owners the opportunity to plan,” said Mr Gundani.

“You are not just have to been in public defending the currency but policies should be effective enough to stabilise the currency and this is what we need to see the Governor doing which he has been in the meantime,” said Mukove.

The country has grappled with currency problems for over two decades until the Second Republic introduced the first ever gold backed ZiG currency which has so far exceeded market expectations.

Analysts contend the Central Bank has struck the right code in dealing a two decade currency problem that has been a thorn in the flesh for the country’s national economic development aspirations.

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