Zimbabwe’s Central Bank Governor has reassured the public that the recent 43% drop in the value of the country’s gold-backed currency, the ZiG, will not happen again.
In an interview with the Zimbabwe Broadcasting Corporation, posted on X, John Mushayavanhu, Governor of the Reserve Bank of Zimbabwe, he explained that measures are being put in place to protect the currency from further sharp devaluation.
“It was a once-off. We expect things to stabilise going forward and should start to see prices fall,” he said.
The ZiG, which stands for Zimbabwe Gold, lost 43% of its value on 27 September, now standing at 24.4 per US dollar.
This decline happened due to a significant difference between the official and unofficial exchange rates. Zimbabwe has tried to introduce a stable local currency six times since 2009.
Since the devaluation, the ZiG has dropped by more than 7% on the official market, with the rate recorded at 26.33 per US dollar as of Friday, according to data from the central bank.
However, this is still much lower than the unofficial market rate, which ranges between 40 and 50 ZiG per US dollar, as reported by ZimPriceCheck.com, a website that tracks exchange rates.
In the past, Zimbabwe’s efforts to maintain a stable local currency failed due to hyperinflation caused by excessive money printing to cover government expenses.
To prevent this from happening again, Mushayavanhu said the central bank will control the growth of money supply by limiting the amount of credit banks can create.
He emphasised that with these new measures, the currency should stabilise and inflation pressures will reduce, helping the economy recover.