Extensive consultations were conducted with key stakeholders prior to the announcement of this year's monetary policy statement which introduced the new ZiG currency, Reserve Bank of Zimbabwe Governor John Mushayavanhu has said.
Taking office at the beginning of the month, his official appointment was announced on December 8 last year but President Mnangagwa had informed him of the decision in September, allowing him to begin the groundwork well in advance.
Dr Mushayavanhu, who unveiled his first monetary policy statement recently, faced criticism regarding consultations with key stakeholders during its formulation.
The policy statement largely focuses on currency and exchange rate stability, financial sector stability, optimal money supply management, foreign exchange mobilisation and accumulation and increased demand for the new structured currency known as ZiG.
Dr Mushayavanhu said a lot of consultations were done prior to the introduction of ZiG with representative bodies such as Confederation of Zimbabwe Industries (CZI) making huge contributions towards its "invention".
He was addressing businesspeople attending a breakfast meeting organised by the Zimbabwe National Chamber of Commerce (ZNCC) in Gweru yesterday.
The meeting was aimed at unpacking the monetary policy statement presented 12 days ago.
"Consultations before the MPS were made yes. In fact, my appointment was announced on December 8, but His Excellency had told me on September 11 that I was going to be the Governor of RBZ, so I started working as Governor from far back as September 11 and we consulted far and wide. We didn't come to Gweru but we spoke to the Chamber of Mines, ZNCC, Retailers Association, CCZ, and you will be surprised to note that most of the input we had came from the stakeholders," said Dr Mushayavanhu.
"We borrowed a lot from a paper that was presented by CZI. We didn't invent ZiG, it was invented by CZI. They are the ones who said to us that when we look at the amount of "RTGS" and "bond" in circulation (which became the Zimbabwe dollar) that if we convert them, we can buy it all and start afresh. This came from CZI and so we consulted far and wide."
The Governor detailed discussions with various industry bodies, including the Chamber of Mines, ZNCC, the Retailers Association of Zimbabwe, and the CZI.
He expressed confidence that the ZiG would address exchange rate volatility, curtail inflation and restore durable macro-economic stability.
"The MPS highlighted the latest policy framework aimed at rebuilding market confidence and trust. The people need to trust in the banking system again so that they save and bank their money again. So I am saying there will not be any room for excessive printing of money because that causes inflation. Under my watch there is not going to be any printing of money in excess of the gold that the central bank has," he said.
"That's a cardinal rule at the central bank and we have systems that we are putting in place to make sure that we don't break that cardinal rule. If that happens under my watch, please crucify me."
Dr Mushayavanhu said the structured currency was anchored by a composite basket of currencies and precious metals (mainly gold) held as reserves for this purpose by the Reserve Bank.
"So each year we are going to have independent auditors coming in to audit the gold and the foreign currency reserves we have that back ZiG. We had President Mnangagwa and the media at the RBZ to see the gold reserves we have, that is 2,5 tonnes of gold and US$300 million that are backing ZiG. We are confident that ZiG is going to address exchange rate volatility, curtail inflation and restore durable macro-economic stability as country works on doing away with the multicurrency regime by 2030," he said.
He assured the business community that the Reserve Bank was independent from the Government, adding that the independence was clearly spelt out in the RBZ Act.
"We are not subject to interference by the Ministry of Finance, Economic Development and Investment Promotion. I want to assure you that when I went to the central bank, the first thing I was interested in was to confirm whether or not the Ministry of Finance was dipping into the coffers of the central bank whenever they felt like it.
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"I could not find an occurrence when the Ministry used its overdraft facility whenever they wanted. The Ministry of Finance is running a surplus budget and if anything we handle their deposits and we are seeing how they are running their accounts every day," said Dr Mushayavanhu.
He reiterated that the idea behind the MPS was to make sure that the people accepted the ZiG.
"Once we do that, we create a currency that is acceptable. Remember with the currency we had in the past, as soon as one got the RTGS in the account, they made sure that by the end of the day they would have changed it to US dollars at whatever price. But we want to create a currency that is stable, which you can sell and that way you see people banking the extra money they have and start building up towards something they will be investing in or achieve," said Dr Mushayavanhu.
