The
Zimbabwe
ZiG
currency
has
held
steady
this
year,
helped
by
the
ongoing
economic
recovery.
Data
by
the
Zimbabwe
Central
Bank
shows
that
the
USD/ZWG
was
trading
at
26.40,
a
level
it
has
remained
at
in
the
past
few
months.
Why
the
Zimbabwe
ZiG
has
stabilized
The
ZiG
currency
has
been relatively
stable this
year
for
several
reasons.
First,
there
are
signs
that
the
country’s
economy
is
doing
relatively
well
this
year.
Estimates
are
that
it
will
grow
by
6%
this
year
and
cross
the
important
milestone
of
$52.3
billion.
The
main
catalyst
for
the
economic
recovery
is
the
agricultural
sector,
which
is
expected
to
grow
by
21%
this
year.
This
is
an
important
thing
because
the
country
went
through
a
slowdown
last
year,
leading
to
more
imports.
Also,
the
country’s
tobacco
exports
surged
this
year.
Data
shows
that
the
country
exported
352.7
million
kilograms
of
the
crop,
mostly
to
China,
a
big
increase
from
what
it
sold
last
year.
The
mining
sector
is
also
doing
well,
helped
by
more
production
and
price
increases.
Gold,
which
accounts
for
about
53%
of
its
exports, jumped
to
a
record
high,
a
trend
that
some
analysts
believe
will
continue.
The
country
produced
36.5
tons
of
gold
last
year
and
now
plans
to
produce
40
tons
this
year.
The
rising
gold
price
is
important
for
the
Zimbabwe
ZiG
because
it
has
led
to
a
significant
increase
in
its
reserves.
Data
shows
that
the
reserves
have
jumped
to
over
$750
million,
which
is
enough
to
cover
one
month
of
imports
requirements.
The
currency
has
also
done
well
this
year
because
of
the
tight
monetary
policy
in
the
country.
Data
shows
that
the
benchmark
interest
rate
has
remained
unchanged
at
35%
since
September
last
year.
In
theory,
this
should
lead
to
more
demand
for
the
currency
because
of
carry
trade
implications.
Additionally,
Zimbabwe
has
been
engaged
in
talks
with
some
of
its
top
lenders,
especially
the
IMF.
These
talks
are
aimed
at
resolving
the
multi-decade
debt
crisis
that
has
locked
it
out
of
the
financial
market.
The
IMF
has
expressed
openness
to
help
Zimbabwe,
only
if
it
agrees
to
restructure
its
external
debt
and
clears
its
arrears
to
agencies
like
the
World
Bank
and
AfDB.
Zimbabwe
hopes
to
phase
out
the
US
dollar
The
Zimbabwe
ZiG
has
held
steady
as
the
central
bank
and
the
Ministry
of
Finance
have
expressed
hopes
to
gradually
phase
out
the
use
of
the
US
dollar
by
2030.
This
would
be
a
big
deal
because
most
of
the
transactions
in
the
country
are
handled
in
US
dollars.
Still,
some
analysts
warn
that
ending
the
use
of
the
greenback
will
lead
to
economic
challenges.
Precisely,
it
will
remove
the
bout
of
stability
that
the
greenback
has
brought.
In
a
recent
statement,
the
head
of
Imara
Asset
Management
said:
“A
free
and
widespread
use
of
the
dollar
within
the
economy
has
made
it
easier
for
corporates
and
individuals
to
transact
and
plan.”
Still,
the
stability
of
the
Zimbabwe
ZiG
is
not
a
sign
that
it
will
continue
doing
well.
Besides,
the
other
currencies
that
ended
up
failing
started
well,
only
for
them
to
implode
a
few
years
later.
Source:
Here’s
why
the
Zimbabwe
ZiG
currency
stability
is
continuing