Zimbabwe's authorities announced the country's plans to convert its annual budget to the recently introduced gold-backed currency, the Zimbabwe Gold (ZiG). This move aims to address the challenges posed by the volatile Zimbabwean dollar and provide greater stability for the nation's finances.
Finance Minister Mthuli Ncube informed lawmakers that the budget, originally presented in Zimbabwean dollars, will be converted to ZiG by the end of May or early June. He emphasized that this transition involves a straightforward exchange rate translation, ensuring alignment of revenues and expenditures with the actual budget.
"This is an exchange-rate translation at the end of the day. It’s just moving from one currency to another," he said. "It’s very important that we use an exchange rate that is marked to market to make sure that we can align those revenue and expenditures to the real budget."
The introduction of the ZiG in April marked Zimbabwe's sixth attempt since 2008 to establish a stable domestic currency. The Zimbabwean dollar's significant depreciation against the US dollar this year, losing approximately 80% of its value, made budgeting increasingly difficult.
The ZiG, backed by gold reserves, offers a potential solution to the currency instability that has plagued the nation. As of Monday, the ZiG traded at 13.67 to the US dollar, according to the Reserve Bank of Zimbabwe.