The introduction of the new ZiG currency has had a significant impact on the foreign exchange market, leading to a decline in parallel market activity. Initially, illegal money changers sought to exploit the situation, offering inflated rates of 20 ZiG for one US dollar, well above the official rate of 13.56. However, this trend has been curbed, with market observers noting a reversal in artificial losses.
Reports state that the value of the ZiG currency has increased and that exchange rates have stabilised at 15 or 16 ZiG for every US dollar. This observation is corroborated by data from the Reserve Bank of Zimbabwe website, which indicates that the interbank exchange rate firmed from 13.42 to 13.36.
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Market analysts stress that maintaining the value of the ZiG requires limiting the expansion of the money supply and increasing production. They urge Dr. John Mushayavanhu, the governor of the Reserve Bank of Zimbabwe, to keep his word and properly control the expansion of the money supply.
Mr Kipson Gundani, CEO of the African Roundtable, emphasises the necessity for increased production to support the currency, while Dr. Nyasha Kaseke, senior economic lecturer at the University of Zimbabwe, emphasises the significance of managing the money supply to preserve currency stability.
In order to address worries about the excessive expansion of the money supply, which has been identified as a factor of currency volatility, the Reserve Bank of Zimbabwe has reaffirmed its commitment to concentrating on activities in line with its mission.