Zimbabwe to launch 'Structured Currency' linked to gold

The Zimbabwean government is gearing up to launch a new currency initiative, what they are calling a “Structured Currency,” in an attempt to address the ongoing volatility in the country's exchange rates. Speculations abound regarding the possible strategies that the government might adopt to stabilize the currency. One suggestion is anchoring the local currency to gold, drawing parallels to historical practices like the gold standard era in the 70s. Another proposal is the introduction of a currency board, which would tie the local currency to a stable anchor currency, often the USD. Both options hinge on the availability of sufficient reserves of gold and USD to support the currency's value. However, concerns have been raised about the government's ability to maintain the necessary discipline and adherence to these strategies. The absence of clear communication from the authorities has fueled uncertainty and skepticism among various stakeholders, including trade unions, who have criticized the lack of consultation on the proposed currency reforms. Dr. Prosper Chitambara, an Independent Development Economist, highlighted the challenges posed by the country's soaring money supply, emphasizing the need for stringent measures to control liquidity based on gold and USD reserves. Despite the potential benefits of these reform options in addressing economic instabilities, doubts linger over the government's commitment and execution of the plans. The lack of transparency and consultation could further erode public confidence in the currency, potentially undermining the success of any reform initiative.