Zimbabwean Officials Concerned About Decline of New Currency

Zimbabwe Cracks Down on Illicit Moneychangers Amid Currency Decline

Mount Hampden, Zimbabwe — In response to the recent decline in the new gold-backed currency, Zimbabwean authorities have taken swift action by apprehending illicit moneychangers and closing the bank accounts of businesses accused of exclusively dealing in U.S. dollars.

Business owners in Zimbabwe pleaded with parliamentary committees on Monday to urge the government to cease arresting moneychangers and reopen the bank accounts of companies accused of only accepting foreign currency.

Sekai Kuvarika, CEO of the Confederation of Zimbabwe Industries, described the current situation as an inception process of a monetary policy shift. He emphasized the need to give the market and policymakers time to iterate on how the policy will work in the markets.

Last week, police arrested individuals involved in fueling the black market where Zimbabwe’s new currency, ZiG, is trading at around 20 ZiG for one U.S. dollar, despite the government’s official exchange rate of 13 ZiG to a dollar.

Owen Mavengere from the Institute of Chartered Accountants of Zimbabwe expressed concerns about the arrests, stating that a softer approach should be taken to address the root cause of the issue. He suggested that the government should lead by example and start using the ZiG currency.

The government has announced that for now, commodities like fuel and import duties will still be paid with U.S. dollars. Parliament has summoned Finance Minister Mthuli Ncube and Reserve Bank of Zimbabwe Governor John Mushayavanhu to explain the rollout of the ZiG currency, with the next stage set for April 30 when physical notes and coins will be introduced to the public.