FINANCE Minister Prof Mthuli Ncube has been slow to clarify the appointment of independent auditors tasked with verifying the reserves supporting the recently introduced ZiG currency.
The nation ushered in its sixth currency on April 5, 2024, with the Reserve Bank of Zimbabwe asserting that it was backed by 2.5 tons of gold and US$100 million in cash.
The ZiG has experienced a 1.6% increase on the official market, but like its predecessor, it has encountered challenges on the parallel market, where its value has depreciated by 20% since its inception.
In discussions with Bloomberg on the sidelines of the International Monetary Fund’s (IMF) spring meetings in Washington D.C., Prof Mthuli Ncube was pressed to disclose details about independent auditors tasked with verifying the reserve stocks. However, he could not provide immediate clarity.
“It’s crucial for the public to have confidence in the existence of these reserves backing the currency. By law, we have established mechanisms for auditors to verify the existence of this gold.
“We have a firm of auditors who already audit the central bank, so we will start from there or engage another firm if necessary. There is nothing to conceal. We are open to engaging any auditor, as confidence is paramount,” he stated.
These comments come at a time when many citizens and stakeholders, both locally and internationally, remain skeptical, treating the shared statistics with caution. Ncube defended Zimbabwe’s current economic challenges, attributing them to broader continental issues.
“Many African countries and others in emerging markets are grappling with currency stabilization. Everyone is seeking ways to stabilize their currencies to maintain competitiveness.
“In Zimbabwe, we have sought stability by linking our currency to reserves such as gold, diamonds, and hard US$. That’s the foundation of our approach,” he explained.
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He emphasized that the newly introduced currency was structured akin to a currency board but without a fixed exchange rate, instead relying on firm asset backing to mitigate volatility.
Ncube clarified that Zimbabwe was not reverting to the gold standard and reiterated the commitment to controlling the issuance of domestic currency and reserve money, aligning it with base reserve assets.
“As part of my role this week, I’ve been elucidating to the International Monetary Fund how this currency operates, its genesis, and the challenges. While they have offered constructive advice, which I can’t disclose publicly, our collaboration has been productive,” he noted.
He added that the current exchange rate, ZiG13.56 to the US$, is competitive when compared with other currencies in the region, such as the South African rand, Botswana pula, and the Zambian kwacha.”
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