HARARE – Despite it being touted as the proverbial masterstroke towards stabilising a volatile domestic currency, the Zimbabwe Gold (ZiG) still cannot be used to buy a drop of fuel from a service station, according to a statement by the Reserve Bank of Zimbabwe (RBZ).
The new gold backed ZiG was announced on Friday by central bank governor John Mushayavanhu.
It launched on Monday trading at an initial rate of 13.56 to US$1.
The new currency replaced the much-resented Real Time Gross Settlement Dollar (RTGS) and subsequently the Zimbabwe dollar, battered by brutal inflation which saw the controversial method of exchange lose about 80 of its value this year alone and had been trading at 28,720 to US$1 before the change.
Doubts have however met ZiG with many believing its value shall soon be decimated by the continued demand for the US dollar, now commonly used by locals as a store of value to hedge savings from a stubborn inflation.
In a statement, RBZ did not help any matters when it said Tuesday the current US dollar denominated fuel pricing regime shall remain in place despite locals being encouraged to embrace the new currency.
“The current pricing mechanism in the fuel sector will remain in place until otherwise reviewed,” said the apex bank.
“As Reserve Bank and government work towards wider use of ZiG, the fuel sector will be encouraged to accept ZiG for fuel purchases.”
In Zimbabwe, fuel suppliers were allowed to sell in foreign currency with only government company NOIC dispensing the valuable liquid in local currency.
Fuel is procured from outside the country.
The US dollar remains crucial to importers of the petroleum product.
Past selling of the product in local currency have backfired with merchants first having to source for US dollars before importing the liquid.
Government was forced to change its policy stance by allowing fuel trading in foreign currency and that is when fuel availability from service stations improved almost immediately.
