{"Items":[{"Id":18779,"Title":"Zimbabwe to boost gold output to bolster ZiG currency","Author":null,"Summary":"Zimbabwe is urging gold miners throughout the country to increase output to support the recently launched ZiG currency.","Body":"

\"\"Zimbabwe is urging gold miners throughout the country to increase output to support the recently launched ZiG currency.

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This is according to Mines and Mining Development Minister, Winston Chitando.

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“This new currency is anchored on gold production, we have to determine ways to increase production,” Chitando said on Monday during a meeting with miners in the Zimbabwean capital of Harare. 

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Zimbabwe has been amassing gold reserves in the central bank's vaults to support Zimbabwe Gold, known as ZiG. 

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This currency is backed by 2.5 tons of gold and $100 million. It represents the country's sixth effort in 15 years to establish a stable local currency, Bloomberg reports.

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Since late 2022, miners have been required to pay a portion of their royalties to the state partly in commodities and cash, in order to help boost reserves.

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To help boost production, the government will encourage artisanal and small-scale miners to collaborate with medium- and large-scale miners to produce more gold, the Mines and Mining Development Minister stated.

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“At this stage, production from medium- to large-scale miners for the first quarter was higher from same period last year,” Chitando added.

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In addition, the minister stressed the need to ensure that gold is delivered through the proper channels and that all mining activities are conducted responsibly and sustainably, in compliance with the country's laws.

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The southern African nation, which is rich in mineral resources such as platinum, lithium, and diamonds, aims to increase gold production to 40 tons this year, a rise from 30.1 tons in 2023.

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The ZiG began trading on 8th April, replacing the old Zimbabwean Dollar, which had been ravaged by inflation. 

\r\n","IsApproved":true,"IsDeleted":false,"PublishedDate":"2024-05-22T00:00:00","CreatedDate":"2024-05-22T11:19:34.093","ItemCategory":{"Id":8,"Abbreviation":"MN","Definition":"Markets"},"WebPage":{"Id":70025,"Name":"Zimbabwe-to-boost-gold-output-to-bolster-ZiG-currency","Header":null,"MetaTitle":"Zimbabwe to boost gold output to bolster ZiG currency","MetaKeywords":"ZiG currency, Gold","MetaDescription":"Zimbabwe is urging gold miners throughout the country to increase output to support the recently launched ZiG currency.","IsDeleted":false,"CreatedDate":"2024-05-22T11:19:34.093","WebsiteId":3,"WebPageTypeId":4},"Images":[{"FullFilePath":"https://cmsdevere.blob.core.windows.net/images/original_6d7461a9-7f8c-4cce-a95a-ca8826692004.jpg"},{"FullFilePath":"https://cmsdevere.blob.core.windows.net/images/large_6d7461a9-7f8c-4cce-a95a-ca8826692004.jpg"},{"FullFilePath":"https://cmsdevere.blob.core.windows.net/images/medium_6d7461a9-7f8c-4cce-a95a-ca8826692004.jpg"},{"FullFilePath":"https://cmsdevere.blob.core.windows.net/images/small_6d7461a9-7f8c-4cce-a95a-ca8826692004.jpg"},{"FullFilePath":"https://cmsdevere.blob.core.windows.net/images/og_6d7461a9-7f8c-4cce-a95a-ca8826692004.jpg"},{"FullFilePath":"https://cmsdevere.blob.core.windows.net/twitter-images/twitter_6d7461a9-7f8c-4cce-a95a-ca8826692004.jpg"}]},{"Id":18736,"Title":"Zimbabwe to fine firms not using official ZiG exchange rate","Author":null,"Summary":"Zimbabwe has announced it will impose penalties on individuals and businesses that do not use the prevailing official foreign-exchange rate of its new ZiG currency for transactions.","Body":"

\"\"Zimbabwe has announced it will impose penalties on individuals and businesses that do not use the prevailing official foreign-exchange rate of its new ZiG currency for transactions.

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The country’s Finance Minister Mthuli Ncube announced in a statement published on Thursday that the government will impose a fine of 200,000 ZiG ($14,782) on firms and individuals found not using the prevailing official foreign-exchange rate of the new ZiG currency for transactions. 

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Earlier in the week, the Treasury Chief had warned of impending regulations to enforce the sole use of the official exchange rate in the economy, which is set daily by the Reserve Bank of Zimbabwe, Bloomberg reports.

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In an effort to curb the parallel market, the government has designated the official ZiG exchange rate as the sole reference for currency trading.

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The new rule also eliminates a previous requirement for retailers to price their goods within 10% of the official exchange rate for profit margins. This regulation made them uncompetitive against informal traders in the competition for Dollars, as their goods became more expensive. 

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The ZiG, short for Zimbabwe Gold, was introduced on 5th April, replacing the Zimbabwean Dollar, which had lost 80% of its value this year. 

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This new currency marks the sixth attempt by the southern African nation to establish a functional local currency. It is backed by 2.5 tons of gold and approximately $100 million in foreign currency reserves held by the central bank.

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Banknotes and coins of the ZiG were issued to the public at the end of April.

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According to data on the central bank's website, the ZiG was trading at 13.53 to the Dollar on Thursday. However, it dropped to a record low of 13.67 to the Dollar on Monday, the lowest since its introduction a month ago.

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\"\"Governor of Zimbabwe's central bank, John Mushayavanhu has expressed concern that the appreciation of the country's new currency against the Dollar could lead to deflation.

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"What my fear actually is now is that we could be faced with deflation as opposed to inflation. Why would anyone increase prices in a currency environment which is strengthening," the governor said during a recent interview with ZimPapers Television Network.

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Zimbabwe Gold, or ZiG, has risen 0.8% against the Dollar since it began trading last Monday. The new currency, backed by gold and a basket of foreign currencies, marks Zimbabwe's sixth endeavour to establish a viable local currency since 2008.

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Each ZiG is valued at approximately 7 US cents, equivalent to the price of a milligram of gold, Bloomberg reports.

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The new currency replaced the Zimbabwean Dollar, which depreciated by four-fifths of its value against the US Dollar this year before being replaced. This depreciation fuelled inflation and triggered painful memories among citizens of the hyperinflation era.

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Last year, Zimbabwe ceased publishing local currency inflation data, opting for a measure that more accurately reflects the significant influence of the US Dollar in the economy. According to this measure, inflation surged to a seven-month high of 55.3% in March.

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However, the central bank governor has said that the national statistics agency will now publish inflation in both ZiG and US Dollars.

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Furthermore, he also defended the central bank's decision to set the key interest rate at 20% when the new currency was introduced on Friday, a significant reduction from the 130% rate on the old unit.

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"Interest rates are also based on inflation targeting and if we are targeting that we will end the year at between 2% and 5%, then it follows that interest rates should also fall. If we got it wrong, the monetary policy committee meets every quarter and can review," Mushayavanhu added.

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