The Reserve Bank of Zimbabwe (RBZ) has said the newly-introduced “structured currency” known as Zimbabwe Gold (ZiG), still cannot be used to buy fuel from service stations.
Some notable economic commentators have already predicted that the value of ZiG, which had an initial rate of 13.56 to US$1 when it was launched on Monday, will fall soon.
In a document released on Tuesday addressing some of the questions about ZiG, the RBZ said motorists won’t be immediately able to buy diesel and petrol using the new currency. It said:
The current pricing mechanism in the fuel sector will remain in place until otherwise reviewed.
As the Reserve Bank and government work towards wider use of ZiG, the fuel sector will be encouraged to accept ZiG for fuel purchases.
Fuel is imported, and local fuel retailers sell it exclusively in foreign currency. In the past, fuel has run out in the country when dealers were forced to sell it in the local currency.
When the government changed its policy stance by allowing fuel trading in foreign currency, the product became readily available at service stations.
The Central Bank also said ZiG is not yet recognised internationally and cannot be used to make international payments as it has not yet achieved convertibility. It said:
ZiG is a local currency that has just been launched and has not yet achieved convertibility. The Bank will work to strengthen the currency to attain full convertibility, consistent with the regional agenda for macroeconomic convergence under the SADC Protocol on Finance and Investment.
ZiG replaced the Real Time Gross Settlement Dollar (RTGS) and subsequently the Zimbabwe dollar, which lost about 80% of its value this year alone and had been trading at 28,720 to US$1 before the change.
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