Professor Hanke Identifies Zimbabwe’s ZiG as Second Worst Currency Globally
Professor Steve Hanke ranks Zimbabwe’s ZiG as the second worst currency worldwide, losing 50% of its value in ten months, trailing only behind Venezuela’s Bolivar. The Reserve Bank of Zimbabwe is working to stabilize the currency amid lack of adherence to official exchange rates and trust issues.
Renowned economist and currency expert Professor Steve Hanke has classified Zimbabwe’s ZiG currency as the second worst globally, surpassed only by Venezuela’s Bolivar. Hanke’s recent analysis indicates that the ZiG has depreciated by 50% against the US dollar over the past ten months, predominantly due to inflationary pressures. In comparison, the Bolivar experienced a deterioration of 52%, while the Iranian Rial and Ethiopian Birr fell by 24% and 25%, respectively.
Since its introduction at an exchange rate of US$1 to ZiG2.50 last year, the currency has experienced considerable decline, currently trading between ZiG33 and ZiG40 on the black market. This depreciation is attributed to a lack of confidence in the so-called “gold-backed currency.” The informal economy in Zimbabwe further complicates adherence to the government mandate requiring businesses to follow the official exchange rate of US$1 to ZiG26.
Hanke’s observations coincide with a recent commitment by the Reserve Bank of Zimbabwe (RBZ) to stabilize the ZiG. The RBZ attributes the currency’s volatility to the lack of government enforcement regarding its usage in transactions for essential goods like fuel and passport fees. RBZ Governor Dr. John Mushayavanhu emphasized the importance of establishing adequate use case scenarios for the ZiG in a recent meeting with the Tourism Business Council of Zimbabwe (TBCZ).
In summary, Professor Steve Hanke’s findings highlight the severe depreciation of Zimbabwe’s ZiG currency, which has lost half of its value within a year. Contributing factors include inflationary pressures and a lack of trust among the populace. The Reserve Bank of Zimbabwe is making concerted efforts to stabilize the currency, yet challenges remain due to the informal economy and government enforcement difficulties.
Original Source: www.newzimbabwe.com
