It’s been almost a month since Zimbabwe rolled out its newest currency in circulation which brought both hope and controversy for the southern African country.
The currency was met by great skepticism. And frankly, given Zimbabwe’s recent monetary history of hyperinflation, not once, but twice in the past 20 years, this is understandable. All the headlines were negative. The currency had few friends. But this new, gold backed currency has actually exceeded the low expectations surrounding it.
For those who are interested, here’s a summary of Zimbabwe’s currency history:
And here’s a brief introduction of Zimbabwe’s new currency:
Zimbabwe initiates ‘gold’ currency to substitute dollar | MENAFN.COM
Despite the negativity and resistance towards it, there are some good news, if one knows where to look:
Zimbabwe’s ZiG currency STILL stronger than the rand!
Zimbabwe’s currency, the ZiG, continues to hold firm after its debut, the central bank in the country said.
Also: Motorists now able to buy petrol, diesel using new ZiG currency
Zimbabwe asks miners to ramp up gold output to support new currency
“This new currency is anchored on gold production, we have to determine ways to increase production,” Chitando said Monday in a meeting with miners in the capital, Harare.
In other countries, here are some recent outlooks for their currencies . . .
Kenya’s currency forecast to gain, Nigerian naira to ease
Kenya’s currency is expected to strengthen against the dollar in the coming week to Thursday, while the Nigerian naira, Ghana’s cedi and Zambia’s kwacha are seen easing and Uganda’s stable, traders said.
Good News: Nigeria’s Foreign Reserves Rise as Naira Gains After CBN Sells Dollar to Banks, Others
South African rand near five-month high before S&P review
The rand has rallied this week to its strongest levels in 2024, helped by an improvement in risk sentiment as bets grow that the U.S. Federal Reserve may cut interest rates in September.
Did You Know?
15 STRONGEST CURRENCIES IN AFRICA IN 2024
The strength of a currency reflects its purchasing power relative to products and other currencies in global markets. Essentially, it's the measure of services and goods obtainable and the amount of foreign currency obtained per unit of the national currency. Various local and international factors interplay to determine currency strength, including supply and demand dynamics in forex markets, inflation rates, domestic economic growth, central bank policies, and the country's economic stability.
To gauge currency strength or identify the most valuable currency globally, we assess these interactions. The ranking of Africa's strongest currencies is benchmarked against the US dollar (USD), the global currency standard.
15 WEAKEST CURRENCIES IN AFRICA IN 2024
Africa, known for its diverse cultures and landscapes, is navigating a complex economic landscape marked by currency devaluation in several nations. This phenomenon stems from various factors such as soaring inflation, limited economic diversification, political instability, conflicts, and sanctions.
In contrast to countries that allow their currencies to freely float in the market, others enforce fixed exchange rates to curb devaluation, which sometimes results in the emergence of a black market where local currency is devalued significantly against the official rate.
Moving forward, there are talks of a common currency to be issued by East African governments to unite the region. While there are rumors that it’s been unveiled, the official announcement was that it’s still a work in progress and the target launch has been pushed to 2031. We are highly skeptical this project will ever come to fruition. The East African Community (EAC) has enough trouble agreeing on things like trading maize among themselves, yet alone designing and implementing regulations for a common currency.
Read this article for more info: SHEAFRA: What You Should Know About East African Community Common Currency - Tuko.co.ke
The video below gives you an idea of this new currency, plus another currency that West African countries are working on to replace the Franc.
More broadly, constant talk of the demise of the dollar, and introduction of a BRICS currency, or talk that African countries should bypass the dollar to trade with trading partners such as China and India make currency issues one of the nosier economic topics on the continent.
But the reality is, the US dollar remains king. And most African economies are constantly battling to secure a large enough dollar supply to keep imports flowing and debt repayments made on schedule.