By Shamiso
Saburi and Davison Marenga –
The announcement of the proposed structured currency by the Reserve Bank of Zimbabwe (RBZ) has left the general population with mixed emotions having endured seasons that saw the country falling into the dungeons of hyperinflation and left multitudes nursing the wounds of poverty during the era of former Reserve Bank of Zimbabwe Governor Gideon Gono and outgoing Governor Dr. Mangudya.
A snap survey conducted by the ZCC shows that many Zimbabweans are unsure about the structured currency and are skeptical about its ability to address the economic turmoil that the country is currently facing considering that the scars of the recent and past poor monitory policies and measures are still fresh in the minds of the citizens, causing them to doubt the effectiveness of any new monetary strategy.
Many citizens regard the economic challenges as a manifestation of the deep political challenges and issues of systemic corruption.
The government intends to introduce a gold-backed structured currency, supported by US dollars which are alleged to have been collected since October 2022, according to former RBZ Governor Dr. John Mangudya. The aim is to stabilize the economy and curb inflation, establishing a Currency Board to ensure exchange rate and price stability.
On the other hand, a currency board is a monetary system where a country’s central bank or monetary authority maintains a fixed exchange rate with a specific foreign currency. This is achieved by issuing local currency units that are fully backed by a reserve of foreign currency, usually a major currency like the US dollar or the euro.
While the details surrounding the structured currency and the establishment of a Currency Board are complex, the average citizen needs to understand how these reforms will impact their day-to-day lives. It is hoped that these measures will lead to stability and prosperity for the people of Zimbabwe, who have endured years of economic hardship.
As we wait for further developments regarding the structured currency, the government must provide clear and transparent information to the public. This will help to alleviate any doubts and restore confidence in the monetary system.
Only time will tell if the structured currency will be the solution Zimbabwe needs to navigate its economic challenges. In the meantime, citizens need to stay informed and engaged in discussions about the future of their country’s currency.
This is the litmus test for the new currency. Will it command the long-lost confidence, which is critical for its survival as a unit of account and means of exchange in this volatile economic environment where the only thing certain is uncertainty? Will this stem currency volatility and exchange rate-driven inflation?
