By Staff Reporter
INTERNATIONALLY acclaimed economist and currency expert Professor Steve Hanke has ranked Zimbabwe’s ZiG currency as the second worst in the world after Venezuela’s Bolivar.
According to Hanke’s latest analysis, the ZiG has lost 50% of its value against the US dollar over the last 10 months due to inflationary pressures.
The Bolivar lost 52% while the third-worst Iranian Rial and the fourth-ranked Ethiopian Birr lost 24%.
Introduced at a rate of US$1: ZiG2.50 last year, the currency has significantly lost value and now trades between ZiG33 and ZiG40 on the black market.
A lack of trust in the ‘gold-backed currency’ has been blamed for its loss in value.
Because of the informal nature of Zimbabwe’s economy, very few are adhering to a government directive for all businesses to use the official US$1: ZiG26 rate.
Hanke’s analysis comes at a time when the Reserve Bank of Zimbabwe (RBZ) recently said it was committed to ensuring the success of the ZiG, primarily its stability.
Its instability has been blamed on the government’s failure to direct its use in the purchase of goods such as fuel and payment of passport fees.
“There are adequate use case scenarios for ZiG at the moment,” said RBZ governor Dr. John Mushayavanhu at a meeting with the Tourism Business Council of Zimbabwe (TBCZ) recently.
