"Exchange Rate Should Be ZiG11.69 Per US$1"
5 months agoSat, 05 Oct 2024 08:09:43 GMT
Economist Professor Gift Mugano has called on the government to clarify the relationship between the value of the Zimbabwe Gold (ZiG) currency and gold, as well as other precious metals.
Mugano asserted that the government appears to have changed its stance on exchange rate determination and should provide an explanation of how fluctuations in gold prices affect the ZiG exchange rate.
Posting on X, Mugano noted that when the Reserve Bank of Zimbabwe (RBZ) launched the ZiG in April 2024, the initial exchange rate of ZiG to USD was calculated as follows:
– ZiG1 = 1 milligrams of gold (ZiG1 = 1/1000)
– Price of 1 gram of gold on 5 April 2024 = US$73.3
– 1 milligrams of gold (i.e., ZiG1) = 73.3/1000 = US$0.0733
-Using a direct formula of exchange rate determination, US$1 = 1/0.0733 = ZiG13.64
If we use the same formula & take into account the price of gold which has since shot to US$85.52 per gram (i.e., US$2,653.25 today), our new exchange should be:
US$1 = 1/0.08552
US$1 = ZiG11.69Ko US$1 = ZiG25 (exchange rate after devaluation) yabvepi?
Please give us the correct government position on the ZiG exchange rate determination & gold price movement nexus so that we can speak we are guided accordingly.
Mugano also urged the government to reconcile statements made by Finance Minister Mthuli Ncube on Wednesday with an excerpt from the RBZ’s Monetary Policy Statement (MPS) that explains the value of the ZiG in relation to other currencies. An extract of the MPS reads as follows:
17. What is going to determine the exchange rate of the structured currency in relation to other currencies?
The starting exchange rate shall be determined by the prevailing closing interbank exchange rate as at 5 April and the London PM Fix price of Gold as at 4 April 2024. The intervening exchange rate shall be determined by the inflation differential between ZiG and USD inflation rates and the movement in the price of the basket of precious minerals held as reserves. The weights will be determined by the composition of reserve assets.
Mugano was responding to remarks made by Minister Ncube during an interview with journalists in Mt Hampden on Wednesday, following President Emmerson Mnangagwa’s State of the Nation Address (SONA) to Parliament.
During the interview, Ncube was asked to explain the central bank’s decision to devalue the ZiG by 42.55 per cent against the United States dollar while gold prices were on the rise.
In his response, Ncube stated that although the ZiG is backed by gold, its exchange rate is not fixed to gold prices. He said:
There is a difference in fixing an exchange rate and there is a difference in backing an exchange rate. Gold backs the exchange rate. So as I speak, our reserves are about US$370 million.
And the central bank has been intervening in the market and has been able to sell the gold which is backing the ZiG to supply the market with much-needed US dollars for importation purposes.
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57 Comments
Anonymous · 5 months ago
Take that gold instead of buying imports build factories create employment mobilisd the working force then lets get to work. The very fundermental fabric of the economics. Its not that difficult
Chomi · 5 months ago
Sometimes we need to learn from our mistakes. Bornfrees are the to blame for every I'll Zim carries on its shoulders today. They pushed for the unlawful removal of Mugabe think a new era was at their doorsteps
Off course a new dawn came what they enjoy today. They chased white people out of Zim now all over the world after that very same white man . What a shame. Stop exposing your ****ity on public platforms and stay putty.
ndururani · 5 months ago
unonyepa iwe, imimi madhara acho ndimi maiva pamberi muchiti Mugabe haangatonge anababa vedu, atongazve isu wotongazve vana vedu ngaendeeee hezvo zvaipa, makapembedza nhunzi muchiti ichakugadzirirai huchi manje mavekuchemei
Anonymous · 5 months ago
Zimbabwean people should unite and remove this clueless govt, who can come and invest in a country with no currency no working banking system. You can't deposit your money and withdraw it at anytime time you feel. Kusvika riinhi asi? 😭😭😭😭
Chigunduru · 5 months ago
I blame the rigging of elections because they cant rig the economy. They now back the Zig with the party onstead of backing it with gold no wonder why its losing value as the price of gold shoots up
Sir African · 5 months ago
Cde Mtisi nailed it when he said its our policy makers ,the ones who created the Zig who dont like it because they are the oness who own most of the building and business in Zimbabwe.The do not want their wealth diluted by a worthless current that is always threatening to crash at sny time soon.
Minister without portfolio · 5 months ago
Zvinopindira vanhu mabasa zvakasiyana siyana.Kune vanhu vane njere dzokuti vakawanawo mukana,they do great.Koita vamwe vane ropa rakanaka,vanoita mabasa asina zero navo.Sana wonini zve ava vezvemari neumwe wake wekubheja kuti Zig harizidonhe ari mupenyu.Asi zvakaoma hazvo
Anonymous · 5 months ago
Mutwayo
. · 5 months ago
Mushayavanhu haatozivi basa. Expecting results from him is like expecting a cat yo guard your home at night
Joyce Mujuru · 5 months ago
Muchatifunga zvenyu mati madii. Baba Mugabe, vaMuzenda, vaNkomo neni tisu chete taiziva zvataiita. Ndadzingwa muZanu makaramba kutsigira bato rangu. Ndaida kuumba Zimbabwe zvino makazviramba. Nyatsokaurai. Ini ndakazvigarirwa kuno kuDotito. Chimbotongwai naana Auxillia anova ex waED. Nakirwai. Tsvatuwaro.
Most higher. · 5 months ago
Zig is not backed with Gold as they say...Tinashe Mugabe come and explain pane Gold rikuwanika hr maZig ita maDNA...
Mushoma · 5 months ago
Why don't our leaders do the needful. In DRC employees are paid in USD and all prices are pegged in local currency and the two currencies cor exist. If we have 370 million dollars worth of gold in reserves and all exports we are making why then is the government failing to pay it's workers in USD to an extent that even private companies are being compeled indirectly to pay workers in local currency.
If everyone is paid in USD the government will be getting taxes in USD that now they are getting the local currency which is loosing value.
Let's not force things Mr of finance
Zelensky · 5 months ago
Gift Mugano come and be our RBZ governor pliz!
zig · 5 months ago
zanu imbavha ndapedza
Richard Mwagura · 5 months ago
Brother Ungano got it right. Government needs to stand by and protect fundamentals. Otherwise Zimbabwe will never have a currency of its own. Apart, the cost of printing a new currency every few months will become unsustainable.
Anonymous · 5 months ago
No surprise here. Kuba. Chete. Ndobasa rezig. Imbavha idzi.
1Fyc · 5 months ago
Mostly it's a waste of time to show calculations to these ncube who appear coming from graveyard, when being asked questions with open answers, handiziwi ndakakundikana uye kungoshandiswawo zvangu zvemari zvirikure neni changu ku werenga yangu. Ndoba ndikawana gap chete. He like to twist yet its open that he can't run his own business. Good to loot and lying daily on the plane.
1Pasi Pamera Ziso · 5 months ago
l think I am losing confidence in Mr Mnangagwa because of his lack of clarity on economic and finance matters. Unless what he has done is a new trick whose results will take us by surprise for which, l will call him a genius of Celestial proportions. Let me wait and see, but this wait and see attitude has killed many people as they realized far too late that nobody is coming to save them
Anonymous · 5 months ago
Most thought removing Bob from power was a grace . They never think a new era was paving way. Mugabe never lost any layer of good governance. It was greedy which led to his removal. Many of you supported it now crying why. Zimbabweans don't know what they want ( full of I know ) claiming they are highly educated.Gone are those days with Mugabe who managed taking Aim great heights in education. Today Zim is number 47 in Africa and 132 globally. The story of Zim is a blame to be answered by those who called them Bornfrees with their **** Hunzwi. During the era of Mugabe Zim had minor problems . The creation split factions by greedy people led to what is today. The worst country to live in the world.
Corruptmore Looto · 5 months ago
@😏Pindula Watch
Wangu wangu 🤣🤣Rand and the krugerrand are two different things
The ZAR is the official currency of South Africa and 2 it is issued by the South African Reserve Bank and 3 it's denominations range from R1-R5 for coins and R10-R200 for banknotes and most importantly it is for everyday transactions, trade and commerce.
Now the Krugerrand is a gold bullion coin made from 22 karat gold and secondly it is issued by the South African Mint and it's denominations range from 1/10 oz, 1/4 oz, 1/2 oz and 1 oz and it's mainly used for investment, collecting and as a store of value.
These are two different things, the value of the ZAR fluctuates with currency markets, demand and supply while the Krugerrand's value tracks gold prices. The rand isn't in any way based on the Kruger, the Kruger is pure gold (91.67%) it is given to those who want to invest in gold or store their value in gold it's availability or lack of it doesn't change the value of the ZAR. Baba, Krugerrand is just the same as the Mosi-oa-Tunya gold coin so what are you talking about my guy, that coin didn't dictate the value of the bond so why would the Krugerrand dictate the value of the rand 😂😂.
My guy it's not about me sounding more knowledgeable in Economics better than you but don't lie to people that the Rand is based on gold 😂😂. I'm not an economist or anything as you tried to claim there but I crave information that's why I know about these things. This information is readily available all you need to do is just read, we never stop learning, everyday we learn something new and when you are corrected just acknowledge you were wrong and learn something which you didn't know before, because you end up sounding ignorant on this non-monetised platform as the Erudite calls it 🤣🤣.
Anonymous · 5 months ago
Apa ndoopasina zvoozikanwa manje.
Anonymous · 5 months ago
Kunyangwe mukatuka vamwe with the worst vocabulary that comes to yo mind or in dictionary, there's a reality to face.
👀👀 · 5 months ago
dai vakatoti Zig is backed up by China coz ndoovarikutora goridhe rese vachienda naro and vachisita vakanganisa land yedu
**** Mbiri · 5 months ago
Ko vaGono zvavari kuti mumba maita nzou iri kutadzisa kufamba kwezvinhu vari kumboti chii chaizvo? Vanoreva here kuti nzou iyi E.D ndiyo iri kudya yega USD kuchisara zvipepa zvinonzi Zig? Ndibatsireiwo
Erudite · 5 months ago
From the comfort of his home using a platform synonymous with white supremacists and incels , Mugano poses ludicrous questions way above his pay grade...The more he continues to post absolute donkey excrement the more desperate he seems to be....The finance minsiter and governor clearly explained the relationship between ZiG and gold yet this pencil pusher continues to ask disingenuous questions... Mugano should focus his allegedly big brain ideas elsewhere like I do not know maybe looking for a decent job... Posting on a toxic echo chamber does not make you a genius but rather the king of all incels.... Erudite out
1
Anonymous · 5 months ago
Hate mugano and sense for the best reason known to you but facts are sturbon. Zig is falling with no influence from moganhu
1
hoy · 5 months ago
fact brother
Anonymous · 5 months ago
Economics is different from Chitepo ideology.
1
1
Anonymous · 5 months ago
There's no economics study at the Chitepo Ideological college... but hero-worshipping and sloganeering..
Erudite · 5 months ago
I do not have time for t****ughbred incels who cannot even formulate a witty username but rather use the unoriginal name "Anonymous"...Mugano is a failed economists heck he could not even keep his seat at the board at ZIMTRADE and if that was not embarrassing enough he backed a briefcase party fronted by the personification of hot air... Nobody worth their salt should listen to what Mugano has to say ..He has the charisma and personality of an incel on 4chan and yet blind sheeplike mongoloids like you blindly follow him because he happens to back your flawed opinion...I am not an Economics guru but I am pretty sure Mugano is wrong.... Erudite out
Sir African · 5 months ago
If you are not an economist why cant you just stay clear from matters people who are experts in their own field?.
As long as our policies are screwed,the economy will fail.The economy is so timidy that it jumps at the sound of a falling leaf.Every economist knows that.
Erudite · 5 months ago
*th.o.r.o.u.g.hbred
Anonymous · 5 months ago
We all know the solution to this conundrum but just best about the bush. It’s got absolutely nothing to do with economics.
Sillyvia · 5 months ago
Fighting a losing battle...
😏 Pindula watch · 5 months ago
That's the truth about a Gold backed currency, Va Mugano has a point, South African rand ragainer strength, you then wonder why have we had our ZiG plummeting almost @43% like that, 🤔I think something is amiss here, it could be a double standard ploy to harness and amass all the strength ZiG requires to garner a formidable force to reckon with
But, on the other part they are so doing it deliberately to see if we follow ZiGs trendsetting in order to restore confidence or they just halted it, could be afflicted by international monetary policies as might not yet be recognised as our currency at the moment
Or could be another act to cushion it's backing in case gold hits a depletion
But at times these learned guys do so deliberately, just an opportunity to amass wealthy during this beseemingly slumber
They should clarify this
Corruptmore Looto · 5 months ago
Rand has been gaining strength mainly because of increased confidence in the GNU, the US Federal reserve loosening its policy, expected GDP growth and other strong indicators such as more business confidence in the economy. Gold has nothing to do with the rand recent strengths. Another thing, the Rand is bought by foreign buyers when the US Federal reserve isn't increasing interest rates because it often provides higher yields for example, Investors borrow money at lower US interest rates and invest in higher-yielding South African assets, such as government bonds, to profit from the interest rate differential. This will all lead to increased demand for the rand, causing it to appreciate. That's what there is all to a currency, 'demand' not being gold backed that is all hogwash. Another thing South Africa is an emerging market so its money is highly trusted and in demand unlike our floundering economy, who in their right mind would want to invest in a Zanu Government currency. Rand and ZiG are very different, the Rand isn't a gold backed currency in any way, it's a fiat currency and the South African Reserve Bank is independent it's policies are not dictated by politicians and politics, that's why you see the likes of Malema constantly making noise about nationalising it.
😏 Pindula watch · 5 months ago
Ehee tazvinzwa munyori, but ever heard of Krugerrand here ndisati nda deepisa hangu
😏 Pindula watch · 5 months ago
@corrupt.....Wangu enda ka ku jozi kwacho kwaunotaura unge you are the finance and econoheritage minister ikoko
South Africa has a Gold backed currency, The Krugerrand, it's the benchmark test that determines the would be strength of the Rand yindava kurasika so
signor Kantage · 5 months ago
there was never been any gold back up from the very day Mr zig was introduced, raibvepi nembavha idzodzi
Bullion · 5 months ago
😳
That · 5 months ago
Yes that rate has to bring back the 4million safeguard deal
Inno marshmello · 5 months ago
😂😂zig richasvika pakubaya pa $1 = 1million ZiG
disgruntled citizen · 5 months ago
this is ****ed up ****. everything is a mess in this damned country
1
2Dum Dum Fin Min · 5 months ago
i dont think this dummy finance minister tool ncube even understands what you are saying, hes probably too busy watching mickey mouse and donald duck cartoons on disney channel the whole weekend
1
3tavez.com · 5 months ago
And the central bank has been intervening in the market and has been able to sell the gold which is backing the ZiG to supply the market with much-needed US dollars for importation purposes.... hoo ska kna makaritengesa gold racho then what's the purpose of using zig? kkk rave kutsigirwa neyi? look zvarave zig now
𝙎𝙞𝙮𝙤𝙮𝙤 · 5 months ago
Mugano ane nyaya kwayo murume uyu asi chokwadi ndechekuti mari inonzi ZiG haina chekuita negoridhe, mari yemuzimbabwe inonzi (Zimbabwe Gold) izita chete asi mari yacho haina anything chekuita negoridhe that's why it is continuing to fall. that's the truth but government will never say that, ini kungotaurawo hangu asi zvinosungisa kutaura chokwadi chakadai 😁😁😁
flying Doc ( 3Ds) · 5 months ago
kuvaraidza nguva kukanga maput nezuva hapana chinobuda . Zig is going nowhere..
yakapera basa isati yabuda ...
Zig imombe yevhu haikamivi mkaka kana kidyiva nyama ...
sekuru
7 · 5 months ago
mugano anenyaya yakanaka vangodii kumuita minister of finance anoziva uyu.
kudos · 5 months ago
Anoziva haadikanwi nemhuka idzi,vanoda matofo avanonyepera at will
Anonymous · 5 months ago
aaaah kana ukagona unoita enemy hom,besa muzimbabwe leadership hapana hapana hapo chokwadi chakanaka hapana zvozikamwa
chevecheve · 5 months ago
He is submitting a substantiated argument on the exchange rate. Can they explain in a language that every Jack and Jill can understand. There is no need for playing around with words. Reality should prevail.
Antman · 5 months ago
Boyz Zimbabwe is Hogwash
👽 · 5 months ago
Mwayera Mutape
