The Zimbabwe Gold (ZiG), today hit its lowest rate against the United States dollar since its inception averaging 13.7031 after hitting a peak of 13.2183 on 23 May.
Reserve Bank of Zimbabwe governor John Mushayavanhu warned the nation in April that those selling the ZiG at 20:1 might find themselves buying it back at 10:1, but according to Zimpricecheck.com, the ZiG is still trading at between 18 and 20:1.
The ZiG has, however, stood its ground against the United States dollar since its introduction on 5 April and is still below 14:1. The Zimbabwe dollar, which it replaced, depreciated by 260% in the first three months of the year, according to the International Monetary Fund.
Zimpricecheck says the maximum rate that businesses can use is 14.0234. The minimum rate the informal sector is using is 14 and the maximum 18. Surprisingly, Zimpricecheck says the cash rate for the ZiG is 20:1, yet the actual ZiG is scarce.
(I have never had a ZiG coin or note of my own since it was launched. I only see it when other people are using it. So far, I have only held a ZiG2 coin and a ZiG 10 note.)
Mushayavanhu had been banking on the ZiG to appreciate following the quarterly tax payments that were due on 25 June.
The government requires companies to pay half of their taxes in ZiG. The taxes are estimated at $300 million which means that companies were expected to look for the ZiG equivalent of US$150 million. ZiG in circulation in the country is equivalent to US$80 million.
The country has enough gold reserves and foreign currency to back the ZiG.
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