Latest news with #ZiG
The Star
a day ago
- Business
- The Star
Zimbabwe boosts gold reserves to 3.4 metric tons to support ZiG currency
HARARE, June 19 (Xinhua) -- Zimbabwe is steadily building its gold reserves to support the Zimbabwe Gold (ZiG) currency introduced in April last year, with reserves now standing at 3.4 metric tons, the Presidential Communications Department said Thursday. In a post on X, the department said President Emmerson Mnangagwa toured the gold vaults of the Reserve Bank of Zimbabwe (RBZ) on Thursday. The RBZ plans to increase national gold reserves to 5 metric tons by the end of this year. In his address to the media after the inspection, Mnangagwa said the reserves are critical, serving as one of the key fundamentals needed for a stable national currency. RBZ Governor John Mushayavanhu said the current gold reserves held by the central bank are more than sufficient to back the ZiG in circulation. He said the ongoing stability of the local currency is a result of rising reserves and sound fiscal policies. The ZiG, launched last April as Zimbabwe's latest attempt at currency reform, has remained largely stable in recent months due to the central bank's tight monetary policy stance. On Wednesday, the International Monetary Fund praised Zimbabwe's macroeconomic stability, noting that the country's disciplined policies have helped stabilize the ZiG and reduce inflation.
TimesLIVE
2 days ago
- Business
- TimesLIVE
Zimbabwe says gold-backed currency stable but investor doubts persist
Zimbabwe's gold-backed currency now has more than 100% reserve cover and is stable, according to the central bank, but doubts over its credibility remain, underscored by a persistent premium in the parallel market. The Reserve Bank of Zimbabwe on Monday kept its benchmark rate unchanged at 35%, citing a stable exchange rate as one of the reasons, and reported total reserves of $701m (R12.63bn). The bank said the portion of transactions carried out using the Zimbabwe Gold (ZiG) currency surged to 43% in May from 26% in April 2024, the month it was introduced. Decades of economic instability and currency devaluations mean most people still use the US dollar for most purchases. But the authorities are hoping the ZiG's gold backing will give Zimbabweans the confidence to adopt it for everyday transactions. "ZiG is our national currency, and as the central bank, we are committed to ensuring its success by maintaining all the fundamental characteristics of sound money, including its function as a reliable store of value," Reserve Bank governor John Mushayavanhu wrote in response to Reuters' questions. "The Reserve Bank has learnt from previous currency failures that maintaining optimum money supply and ensuring monetary stability is vital," he added. Despite the bank's assurances, the gap between the official exchange rate and parallel market rate remains about 20%.
Business Insider
3 days ago
- Business
- Business Insider
Zimbabwe's gold-backed currency faces credibility test despite central bank optimism
Zimbabwe's gold-backed currency, the Zimbabwe Gold (ZiG), continues to face skepticism from both the public and financial analysts, despite central bank assurances of stability and full reserve backing. Zimbabwe's gold-backed currency, the Zimbabwe Gold (ZiG), faces public and financial analyst skepticism Past economic issues, including hyperinflation and currency shifts, continue to erode public trust in new currency measures. The share of transactions using the ZiG has increased, though many citizens still rely on the U.S. dollar due to past economic turmoil. The Reserve Bank of Zimbabwe (RBZ) claims the currency is supported by more than 100% in reserves, including 2.5 tons of gold and $100 million in foreign assets. The ZiG, Zimbabwe's sixth currency attempt in 15 years, was introduced to curb inflation and restore confidence in the local monetary system. Yet many citizens still rely on the U.S. dollar for daily transactions, with past economic turmoil continuing to erode trust. Although the International Monetary Fund has expressed support for the ZiG and its potential to become a full national currency, uptake remains limited. Government efforts to boost usage have yet to overcome deep-rooted doubts among both consumers and investors. According to Reuters, the RBZ kept its benchmark interest rate at 35% on Monday, citing exchange rate stability. It also reported total reserves of $701 million and noted that the share of transactions using the ZiG jumped to 43% in May, up from 26% in April when the currency was launched. The Zig's credibility issues Last year, Zimbabwe introduced a new gold-backed currency known as the ZiG, or Zimbabwe Gold, in a bid to curb longstanding currency instability and decades of hyperinflation. The Zimbabwe Gold (ZiG), has however, continued to face a significant trust gap, as evidenced by persistent premiums in the parallel market, where it trades below the official rate. This skepticism persists despite the central bank's assertion that the ZiG is now backed by more than 100% in reserves, comprising gold and foreign currency. The country's tumultuous monetary history, marked by hyperinflation and abrupt currency shifts, has contributed to this lack of confidence. While responding to Reuters, Reserve Bank Governor John Mushayavanhu reaffirmed the central bank's commitment to the ZiG, stating: ' ZiG is our national currency, and we are committed to ensuring its success by maintaining all the fundamental characteristics of sound money, including its function as a reliable store of value. ' He added, ' The Reserve Bank has learned from previous currency failures that maintaining an optimal money supply and ensuring monetary stability is vital. ' Finance Minister Mthuli Ncube remains optimistic, expressing confidence that monetary reforms will pave the way for $2.6 billion in bridge financing by mid-2026. However, global investors are cautious, with Jetro Siekkinen of LGT Capital Partners stating, " We wouldn't invest in Zimbabwe at the current stages. The country needs to have a lot more development before we would consider it," as reported by Reuters. Analysts have also raised concerns about Zimbabwe's overall reserve position, noting that the country holds just 0.8 months of import cover, well below the International Monetary Fund's three-month benchmark. Other factors include past policy failures, doubts over gold reserve transparency, limited convertibility, and persistent inflation which all fuel skepticism. A strong black-market presence and continued reliance on U.S. dollars further weaken confidence.
Reuters
3 days ago
- Business
- Reuters
Zimbabwe says gold-backed currency stable but investor doubts persist
HARARE/JOHANNESBURG, June 17 (Reuters) - Zimbabwe's gold-backed currency now has more than 100% reserve cover and is stable, according to the central bank, but doubts over its credibility remain, underscored by a persistent premium in the parallel market. The Reserve Bank of Zimbabwe on Monday kept its benchmark rate unchanged at 35%, citing a stable exchange rate, opens new tab as one of the reasons, and reported total reserves of $701 million. The bank said the portion of transactions carried out using the Zimbabwe Gold (ZiG) currency surged to 43% in May from 26% in April 2024, the month it was introduced. Decades of economic instability and currency devaluations mean most people still use the U.S. dollar for most purchases. But the authorities are hoping the ZiG's gold backing will give Zimbabweans the confidence to adopt it for everyday transactions. "ZiG is our national currency, and as the central bank, we are committed to ensuring its success by maintaining all the fundamental characteristics of sound money, including its function as a reliable store of value," Reserve Bank Governor John Mushayavanhu wrote in response to Reuters' questions. "The Reserve Bank has learned from previous currency failures that maintaining optimum money supply and ensuring monetary stability is vital," he added. Despite the bank's assurances, the gap between the official exchange rate and parallel market rate remains about 20%. "The rate has been stable for more than three months," said black-market trader Pearson Tambudze, attributing the stability to a scarcity of the local currency rather than restored confidence. "There isn't a lot of ZiG in the market," he said. The International Monetary Fund has welcomed the ZiG's stability but is urging Zimbabwe to adopt tighter money-growth limits, a more transparent foreign exchange market and to make progress on clearing an estimated $12.2 billion in external arrears. Finance Minister Mthuli Ncube, meanwhile, expressed hope last month that currency stability and appropriate monetary policy would enable Zimbabwe to raise $2.6 billion in bridge finance by mid-2026. Investors, however, remain cautious. "We wouldn't invest in Zimbabwe at the current stages. The country needs to have a lot more development before we would consider it," said Jetro Siekkinen at LGT Capital Partners. Economists also flagged concerns over Zimbabwe's reserve cushion, which stands at 0.8 months of import cover, well short of the IMF's recommended three-month safety net. "In terms of priority, I would consider the clearance of arrears with multilateral creditors to be most important," said Lyle Begbie, an economist at Oxford Economics. Two earlier IMF staff-monitored programmes collapsed within 15 months, and Begbie predicted similar outcomes for future efforts. "Ultimately, we are likely years away from the IMF providing concessional financing to Zimbabwe, even if the country does everything right, which itself is not likely," he said.
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Business Standard
11-06-2025
- Business
- Business Standard
Gold outlook: Dips to remain supported as US-China trade talks underwhelms
Gold performance: On June 10, spot gold prices traded between $3,300 and $3,350 as traders marked time ahead of the announcement of the US-China trade deal talk outcome. The metal closed steady at $3,328. At the time of writing this report, the metal is changing hands at $3,325, up around 0.20 per cent on the day. US-China trade talks concluded: US Treasury Secretary Bessent, Commerce Secretary Lutnick and US Trade Representative Greer met a Chinese delegation led by Vice Premier He Lifeng at London's Lancaster House. US negotiators announced early Wednesday that the United States and China agreed to a preliminary deal on how to implement the consensus the two sides reached in Geneva, which involved lower tariff rates on each other. The US delegation absolutely expects that issues around shipments of rare earth minerals and magnets will be resolved with the framework implementation. US appeals court allows Trump tariffs to stay for now: The US Court of Appeals for the Federal Circuit has allowed Trump's tariffs to remain in effect while legal appeals continue. Gold ETF holdings: As of June 9, total known global gold ETF holdings stood at 88.447 Moz as exchange traded funds (ETFs recorded a net inflow for the second straight week in the week ending June 6 after five straight weekly outflows. Gold ETF holdings are up over 6 per cent year-to-date (YTD). Riots in Los Angeles: The Trump Administration has deployed 700 Marines who will join the roughly 2,000 California National Guard troops stationed in Los Angeles over the weekend, US Northern Command announced Monday. Riots in Los Angeles erupted on June 6 after Immigration and Customs Enforcement (ICE) raids in the city, and the situation remains tense. As a political fallout of the riots, California's Governor Gavin Newsom may be arrested. Newsom said on Monday that he might take legal action over the planned use of Marines, as he called their deployment 'illegal' and 'a blatant abuse of power". IMF wants to see Zimbabwe's gold-backed ZiG to become sole currency: The International Monetary Fund said it wants to see ZiG fully become a national currency as it decides whether to place Zimbabwe on a staff-monitored program. It would involve several measures, including deepening the foreign-exchange market to ensure full price discovery. US Treasury auction: The US 3-year treasury bond sale worth $58 billion went smoothly on Tuesday, which led to lower yields. Shanghai gold premium: Shanghai gold premium stood at $18/Oz as on June 10, which is down sharply from the $60 premium seen on June 6. Data roundup: UK's monthly job report (April), released on Tuesday, was somewhat weaker than expected as average weekly earnings 3Myoy came in at 5.3 per cent versus the estimate of 5.5 per cent, while weekly earnings ex-bonus 3 month/Y-o-Y at 5.2 per cent fell short of the forecast of 5.3 per cent. Employment change 3M/3M at 89,000 was better than the forecast of 40,000. Claimant count rate edged higher from 4.4 per cent in April to 4.5 per cent in May. Jobless claims in May rose by 33.10 thousand. US NFIB small business optimism (May) a 98.80 topped the estimate of 96. US Dollar Index and yields: At the time of writing, the US Dollar Index is trading with a gain of 0.11 per cent at 99.15. Upcoming data: Investors look forward to the US CPI and PPI data (May) to be released on June 11 and June 12, respectively. Going by the estimates, CPI readings are likely to be hotter than the prior month's readings. Gold outlook: The US-China trade talks outcome is somewhat underwhelming. Key issues of China's exports of rare-earth magnets remain unresolved. Trump's tariffs continuing to stay in place is a positive development for the metal industry. Focus will be on today's US CPI data. Decline in gold prices is likely to be shallow. Dip buying is advisable as the key US macroeconomic reports like ISM services, US nonfarm payroll, etc, have not been so encouraging. Support is at $3292 (MCX August gold contract ₹96,000), followed by $3270 (₹95,300). Resistance is seen at $3365 (₹98,000)/$3405 (₹99,200).
