HARARE: Zimbabwe’s central bank introduced a new “structured currency” backed by gold on Friday in a bid to address rampant inflation and stabilize the country’s struggling economy.
The ZiG, short for Zimbabwe Gold, will replace the depreciating Zimbabwean dollar, which has experienced significant devaluation over the past year, leading to soaring inflation rates, announced Reserve Bank Governor John Mushayavanhu.
Mushayavanhu stated that banks would immediately convert existing Zimbabwe dollar balances into the new currency. The ZiG will be fully supported by a reserve basket consisting of foreign currency and precious metals, predominantly gold, providing a foundation of stability, he emphasized.
The introduction of the ZiG aims to bring simplicity, certainty, and predictability to Zimbabwe’s financial landscape, Mushayavanhu noted, unveiling banknotes ranging from 1 to 200 ZiG.
Over the past year, the Zimbabwean dollar has plummeted by nearly 100 percent against the US dollar. Officially trading at approximately 30,000 against the US dollar, it reaches 40,000 on the black market, according to Zim Price Check.
The currency’s depreciation has fueled high inflation rates, which, although moderated from previous triple-digit figures, stood at 55 percent in March, according to official data. This economic turbulence adds to the challenges faced by Zimbabwe’s 16 million citizens, grappling with widespread poverty, unemployment, and the impact of a severe drought exacerbated by the El Niño weather phenomenon.
