Zimbabwe’s Central Bank introduced a new “structured currency” backed by gold, aiming to address rampant inflation and bring stability to the country’s struggling economy.
Dubbed ZiG, short for Zimbabwe Gold, the new currency will supplant the depreciating Zimbabwean dollar, which has experienced significant devaluation over the past year, leading to soaring inflation rates, as stated by Reserve Bank governor, John Mushayavanhu.
Mushayavanhu announced the conversion of existing Zimbabwe dollar balances into the new currency, effective immediately, during the presentation of a monetary policy statement.
The ZiG would be “fully anchored and fully backed” by a basket of reserves comprising foreign currency and precious metals — mainly gold,” he added.
The move aimed at fostering “simplicity, certainty, and predictability” in Zimbabwe’s financial affairs, he added, presenting the new banknotes that will come in seven denominations ranging from 1 to 200 ZiG.
The Zimbabwean dollar has lost almost 100 percent of its value against the US greenback over the past year.
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On Friday it was officially trading at around 30,000 against its more coveted US counterpart — and at 40,000 on the black market, according to tracker Zim Price Check.
Its poor performance contributed to the southern African country’s high inflation rate, which after climbing well into the triple digits last year, was at 55 percent in March according to official data.
This has piled pressure on its 16 million people who are already contending with widespread poverty, high unemployment and a severe drought induced by the El Nino weather pattern.
