Wishing Zimbabwe luck on this experimentation: “Zimbabwe, a nation grappling with economic instability characterized by persistent inflation, has undertaken a notable initiative, with the central bank introducing a gold-backed currency called the Zimbabwe Gold (ZiG), aiming to tame inflationary pressures.”
“All share prices will now be denominated in ZiG, therefore the opening prices for the trading session effective April 8 will reflect the ZiG currency,” Justin Bgoni, the CEO of the Zimbabwe Stock Exchange (ZSE), said.
Since its introduction, ZiG has exhibited remarkable strength against the US dollar, registering a cumulative gain of 0.4% and reaching a value of 13.45 against the dollar, according to central bank data. This resilience stems from the substantial backing of ZiG by 2,522 kilograms of gold and $100 million in foreign reserves, providing a solid foundation for its value in the global market.
Yet, I have a warning: gold cannot save you if you do not make things. If you tabulate all the values of gold in Zimbabwe, it cannot match the intrinsic value of Zimbabwe and the Zimbabwean people. So, it goes beyond gold!
When Ghana made 1 Cedi = 1 USD, I said that unless saving people the time on writing long digits on cheque books, it would not change anything. Of course, over time, the Cedi has lost affinity with US dollars in multiples. Yes,, the Cedi has lost value against the US dollars due to the fact that Ghana is not doing what America does: productivity, innovation and high export.
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Zimbabwe: look at your productivity, improve your balance of trade and payment, and if you do those, you will be fine. Financial engineering on currency is an illusion!
Wishing Zimbabwe luck on this experimentation: “Zimbabwe, a nation grappling with economic instability characterized by persistent inflation, has undertaken a notable initiative, with the central bank introducing a gold-backed currency called the Zimbabwe Gold (ZiG), aiming to… pic.twitter.com/aUhPqB8ud5
— Ndubuisi Ekekwe (@ndekekwe) April 11, 2024
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