- ZiG has remained stable in the official market since its introduction
- This has helped to offset rising inflation rates
- Despite volatility in the black market, ZiG has been able to maintain a stable range
Harare- The Zimbabwe Gold (ZiG), has continued to maintain stability on the formal market since its inception, helping to curb inflationary pressures. On June 17th, the currency traded at ZiG13.4910 per US dollar, up from 13.7 when it was introduced in April.
ZiG's monthly gains have peaked by 0.82%, while its overall gains since inception by 5%.
This currency stability has helped to stabilize inflation in ZiG terms, with a -2.4% rate reported for May 2024. The weighted month-on-month inflation rate, which accounts for price changes in both ZiG and USD, was -0.6%.
Despite volatility on the parallel market, the ZiG has also managed to stabilize in the ZiG19-21 range, marking one of the longest streaks of parallel market stability in recent months.
Compared to other currencies in the Southern African Development Community (SADC) region, the ZiG remains the strongest. However, this is not a rate determined by market forces, but a pegged one.
ZiG experienced a 35% decline on the parallel market in its first month, prompting officials to take measures to prop up the currency, including cracking down on illegal foreign exchange traders and companies refusing to price goods in ZiG.
This is largely due to the market's lack of trust in the officials that ZiG will be affected by sudden policy changes. Currency is a psychological phenomenon, and the perceived instability of the ZiG has translated into its performance on the parallel market.
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