Central Bank Governor John Mushayavanhu has pleaded with Zimbabweans to regain trust in the banking system and resume depositing their savings in banks, as they did in the past.
Zimbabweans have lost confidence in the country’s banking system over the past two decades after the Government changed currencies several times resulting in millions losing their savings.
Addressing business leaders at a Zimbabwe National Chamber of Commerce (ZNCC) organised meeting in Gweru on Tuesday, April 16, to unpack the new Monetary Policy Statement (MPS), Mushayavanhu sought to assure the citizenry saying that under his watch, the Reserve Bank of Zimbabwe (RBZ) will not indulge in excessive money printing, which causes money to lose value. He said:
People need to trust the banking system again so that they can save and bank their money again. I am saying there will not be any room for excessive printing of money because that causes inflation.
Under my watch, there is not going to be any printing of money in excess of the gold that the Central Bank has.
That’s a cardinal rule at the Central Bank and we have systems that we are putting in place to make sure that we don’t break that cardinal rule. If that happens (excess printing of money) under my watch, please crucify me.
Mushayavanhu reiterated that the new currency, Zimbabwe Gold (ZiG) is anchored by a composite basket of currency and precious metals, mainly gold, held as reserves for this purpose, by the Reserve Bank.
He said the government has set aside 2,5 tonnes of gold and US$300 million in cash reserves to back the new currency, to guarantee its stability. Added Mushayavanhu:
Of the 2,5 tonnes, 1,5 tonnes are held in the Central Bank’s vaults, with one tonne held offshore.
So, each year, we are going to have independent auditors coming in to audit the gold and the foreign currency reserves we have that back ZiG.
We had President Mnangagwa and the media at the RBZ to see the gold reserves we have that are 2,5 tonnes and US$300 million that are backing ZiG.
We are confident that ZiG is going to address exchange rate volatility, curtail inflation and restore durable macroeconomic stability as the country works on doing away with the multicurrency regime by 2030.
Since April 6, ZiG has been stronger and remember it is backed by gold, and forex reserves that we have. You can go into a bank and buy, or go in and sell foreign currency.
There is a need for us to be positive about ZiG because there is no gain in attacking the ZiG, to anyone.
We need to start believing in it, it won’t benefit you soiling the new currency, and it won’t benefit the next generation either.
Meanwhile, reports indicate that ZiG is sliding on the black market even though it has marginally gained value against other currencies since its launch earlier this month.
When the new currency was launched on April 5, it was trading at 13.56 to the U.S. dollar, before firming to 13.34, as of 17 April.
However, according to VOA, ZiG is now trading at around 20 on the black market.
More: Pindula News