ZiG-Only Payments Strengthen Local Currency: Zimbabwean Minister
ZiG-Only Payments Strengthen Local Currency: Zimbabwean Minister
The government's directive requiring suppliers to be paid exclusively in ZiG will boost demand for the local currency, said Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube.
This will lead to currency appreciation while preventing excess liquidity, he noted.
“Once you have a liquidity constraint, a money supply constraint in ZiG, any demand for ZiG should see the price of ZiG appreciating, or rather the exchange rate appreciating,” Ncube noted.
The minister outlined measures aimed at strengthening the currency and managing liquidity:
🟠Increased Demand for ZiG: Mandating supplier payments in local currency;
🟠Liquidity Control: Using financial tools—Negotiable Certificate of Deposits, high interest rates—to mop up excess cash;
🟠Fair Pricing: A National Standard Price List setting reference prices for commonly procured goods and services;
🟠Sufficient Reserves: $1.5 billion in reserves to back ZiG in circulation.
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