Zimbabwe: Central Bank to Unveil Monetary Policy Statement Hinged On Structured Currency, Prices Stability

THE Reserve Bank of Zimbabwe (RBZ) is set to unveil the Monetary Policy Statement (MPS) hinged on a structured currency to provide a lasting solution to exchange rate volatility bedevilling the economy.

The RBZ governor, Dr John Mangudya was expected to unveil the blueprint in late February 2024 but however, delayed the announcement in a bid to come up with a water-tight policy announcement to plug weaknesses in broad-based instabilities.

In an update this week, Mangudya revealed that the 2024 MPS is almost done following brief delays aimed at providing a lasting solution to the country’s problems.

“We are expecting monetary policy anytime soon. Currently, we are finalising measures to roll out what the President said in terms of the Structures Currency. This is so that we can have guaranteed price stability and stability of the exchange rate.

“So the delay in announcing the MPS is that we are working on a structured currency that is well supported,” he said.

Markets watchers classify a structured currency as a form of monetary system designed to enhance stability and manage inflationary pressures. Unlike fiat currencies, which rely on government regulation and central bank policies, structured currency takes the form of both fiat and commodity-backed currencies.

It combines the flexibility of fiat money with the intrinsic value and stability of commodities such as gold or any other precious metals. Fiat money is a type of currency that is not backed by a precious metal, such as gold or silver.

It is typically designated by the issuing government to be legal tender and is authorized by government regulation. Simply put, Structured currency is therefore regulated and made up of many parts.

In a related development, President Emmerson Mnangagwa has pictured the strategy as a lasting solution to the country’s economic woes.

“Prudent fiscal and monetary policies and the promotion of a conducive business environment remain critically important for the stability and growth of our economy.

“Accordingly, the fiscal and monetary authorities are implementing a raft of policy measures to arrest price increases, stabilise the foreign exchange rate, maintain the value of our currency, and ultimately encourage savings. We shall soon be announcing the introduction of our structured currency, “he said.

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