Zimbabwe’s journey toward adopting the Zimdollar (ZiG) as the sole currency hinges on meeting specific economic conditions, according to Finance Minister Professor Mthuli Ncube.
Speaking to the media at a post-cabinet briefing this week the minister outlined key factors that need to be in place before a mono-currency system can be implemented. First, he emphasized the importance of having adequate foreign reserves to defend the domestic currency against potential speculative attacks. International standards recommend a six-month import cover to ensure currency stability.
Additionally, Ncube highlighted the need for progress in managing external debt. A high debt load can destabilize the currency and pose risks to the economy.
“We must make progress towards clearing these areas,” Ncube said, stressing the importance of obtaining balance of payments support from international financial institutions.
Other prerequisites include maintaining prudent fiscal policies, a tight monetary approach, and ensuring there are no current account deficits. “We are moving in the right direction,” Ncube stated, noting that the country currently has a positive current account balance. While the country is not yet ready to fully transition to a mono-currency system, the finance minister believes that with the right economic measures in place, Zimbabwe will eventually reach the point where the ZiG becomes the sole legal tender.
