Zimbabwe’s Central Bank has unveiled a new “structured currency” backed by gold as it seeks to tackle sky-high inflation and stabilise the country’s long-floundering economy.
Reserve Bank governor John Mushayavanhu made this known while presenting a monetary policy statement.
The ZiG — short for Zimbabwe Gold — will replace the Zimbabwean dollar which has tumbled in value over the past year pushing inflation through the roof.
“With effect from today, banks shall convert the current Zimbabwe dollar balances into the new currency.
The ZiG would be “fully anchored and fully backed” by a basket of reserves comprising foreign currency and precious metals — mainly gold,” he said.
The Zimbabwean government has announced the introduction of new banknotes to simplify, provide certainty, and enhance predictability in the country’s financial system. The new banknotes will be issued in seven denominations, ranging from 1 to 200 ZiG.
The Zimbabwean dollar has experienced a significant depreciation, losing nearly 100 percent of its value against the US dollar over the past year. Officially, it is trading at around 30,000 against the US dollar, while on the black market, it is valued at approximately 40,000.
The currency’s poor performance has contributed to Zimbabwe’s high inflation rate, which reached 55 percent in March, according to official data.
This economic instability has intensified the challenges faced by Zimbabwe’s population of 16 million, who already grapple with widespread poverty, high unemployment, and a severe drought exacerbated by the El Niño weather pattern.
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