Zimbabwe is working on new measures to stabilise its local currency, including linking the exchange rate to hard assets such as gold and creating a currency board, Finance Minister Mthuli Ncube said.
The Zimbabwean dollar has fallen about 40% since the start of the year, hurt by increased foreign-currency demand from civil servants being paid December bonuses and weaker commodity prices denting inflows.
Last week, President Emmerson Mnangagwa said authorities were looking to introduce a “structured currency” without explaining how that would work, and the central bank governor said that work was ongoing.
“The idea going forward is to make sure that we manage the growth of liquidity, which has a high correlation to money supply growth and inflation. The way to do that is to link the exchange rate to some hard asset such as gold,” said Ncube.
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