Zimbabwe devalues currency amid exchange rate volatility

Harare [Zimbabwe], September 28: The Reserve Bank of Zimbabwe (RBZ), the country's central bank, on Friday devalued the new gold-backed currency by 42.6 percent against the U.S. dollar in its first official adjustment of the exchange rate since its launch in April.
The latest adjustment came after renewed pressure on the exchange rate in recent weeks, as reflected in the widening parallel market rates, which now exceed 30 Zimbabwe Gold (ZiG) per U.S. dollar.
On Friday, the RBZ showed on its website that the ZiG was trading at 24.4 to the dollar from about 14 to the dollar since it was launched in April.
The introduction of ZiG in April marked the latest in a series of attempts by the country's monetary authorities to establish a stable currency in over a decade.
In a separate statement Friday after a meeting of the RBZ Monetary Policy Committee (MPC), RBZ Governor John Mushayavanhu said the central bank resolved to allow greater exchange rate flexibility to stabilize the exchange rate and dissipate inflationary pressures.
The committee also resolved to hike the bank policy rate from 20 percent to 35 percent, and further reduced the amount of foreign currency that individuals can take out of the country from 10,000 U.S. dollars to 2,000 dollars.
"The MPC is convinced that the above measures will go a long way in addressing the emerging exchange rate risks, anchor the inflation expectations, and stabilize prices in the near to short term," the central bank said.
Source: Xinhua