The money supply of ZiG matches what the government wants for lasting money stability that buyers need, according to a Cabinet official. The Finance Minister, Professor Mthuli Ncube, described how the Treasury and the central bank keep strict control of spending. He said the current stable exchange rates, where official and street prices almost match, represent real stability that will continue for many months ahead. Some shoppers and business leaders worry about not having enough ZiG available, which they believe hurts economic activity.
Critics claim ZiG shortages create fake inflation levels that would jump if more local money entered circulation. Monthly inflation for the local currency equaled US dollar rates during January after rising because rent prices went up. Zimbabwe saw month-to-month inflation shoot up to 105 percent for ZiG values last January, much higher than December's 3.7 percent, compared to 11.5 percent for US dollar monthly inflation. February brought ZiG monthly inflation down to just 0.5 percent, staying well under the 5 percent monthly target Treasury set.
Professor Ncube told The Herald that Zimbabwe's low inflation path shows actual economic conditions. He explained that people accuse the system of having no cash available, but this describes exactly what tight money management means technically. He said they maintain this strict approach right away to control inflation as their main goal, not as some artificial trick. The central bank limits available cash through tight money policies and may raise interest rates to fight rising prices and stop excessive borrowing.
The inflation level perfectly matches the amount of ZiG money available right away, making the Reserve Bank's strict money management completely appropriate, Ncube stated. This approach works together with careful government spending because nobody wants public expenses racing out of control until budget gaps must be covered by creating new cash. Making extra money pushes prices higher for most products that many people cannot afford. Careful government spending means living within tax income, with basic services and major projects paid through taxes only.
Capital projects that immediately generate money to repay loans can use borrowed funds, preventing the creation of new money that causes inflation. Professor Ncube emphasized how careful spending and tight money policies work together perfectly. This combination creates the ZiG stability people wanted all along. He said citizens demanded stable economic conditions that allow better planning and give real value to the ZiG currency. People can save money again and trust transactions since the value stays stable.
Zimbabwe focuses on keeping money management tight to support careful Treasury spending habits that stabilize ZiG and fight inflation. The Reserve Bank makes sure all ZiG currency has proper backing from foreign money reserves. Gold and foreign reserves support the ZiG completely. The central bank strategy last year increased gold holdings from 1.5 tonnes to 2.7 tonnes. The cash value of gold and foreign currencies reached US$500 million by December, covering the ZiG money supply over three times. The Reserve Bank plans from 2025 through 2029 to focus exclusively on keeping prices and financial systems stable.
Critics claim ZiG shortages create fake inflation levels that would jump if more local money entered circulation. Monthly inflation for the local currency equaled US dollar rates during January after rising because rent prices went up. Zimbabwe saw month-to-month inflation shoot up to 105 percent for ZiG values last January, much higher than December's 3.7 percent, compared to 11.5 percent for US dollar monthly inflation. February brought ZiG monthly inflation down to just 0.5 percent, staying well under the 5 percent monthly target Treasury set.
Professor Ncube told The Herald that Zimbabwe's low inflation path shows actual economic conditions. He explained that people accuse the system of having no cash available, but this describes exactly what tight money management means technically. He said they maintain this strict approach right away to control inflation as their main goal, not as some artificial trick. The central bank limits available cash through tight money policies and may raise interest rates to fight rising prices and stop excessive borrowing.
The inflation level perfectly matches the amount of ZiG money available right away, making the Reserve Bank's strict money management completely appropriate, Ncube stated. This approach works together with careful government spending because nobody wants public expenses racing out of control until budget gaps must be covered by creating new cash. Making extra money pushes prices higher for most products that many people cannot afford. Careful government spending means living within tax income, with basic services and major projects paid through taxes only.
Capital projects that immediately generate money to repay loans can use borrowed funds, preventing the creation of new money that causes inflation. Professor Ncube emphasized how careful spending and tight money policies work together perfectly. This combination creates the ZiG stability people wanted all along. He said citizens demanded stable economic conditions that allow better planning and give real value to the ZiG currency. People can save money again and trust transactions since the value stays stable.
Zimbabwe focuses on keeping money management tight to support careful Treasury spending habits that stabilize ZiG and fight inflation. The Reserve Bank makes sure all ZiG currency has proper backing from foreign money reserves. Gold and foreign reserves support the ZiG completely. The central bank strategy last year increased gold holdings from 1.5 tonnes to 2.7 tonnes. The cash value of gold and foreign currencies reached US$500 million by December, covering the ZiG money supply over three times. The Reserve Bank plans from 2025 through 2029 to focus exclusively on keeping prices and financial systems stable.
