Zimbabwe has brought into use a new note which is the Zimbabwe Gold (ZiG), with the aim of finishing off inflation and substituting the devastating local currency. This happened after there was a loss of over 70% of the Zimbabwean dollar value in just a single year and inflation that ended over 55%.
According to the central bank manager John Mushayavahu the new currency will circulate alongside foreign currencies. As for the interest rate, the central bank decreased it from 130% to 20% and began the listing of ZiG using the gold rate and the previous rate.
Although disclosure may aim to bolster public trust, the total value of cash assets and gold reserves recorded by the central bank stands at $185 million and $100 million, respectively.
Within three weeks, Zimbabweans can exchange their local currencies at the Reserve Bank of Zimbabwe’s new Replacement Fund for the introduction of the new national quasi-currency unit, ZiG.
The central bank’s decision to raise the interest rate was preceded by months of negotiations between the official authorities and the government to avoid the current currency depreciation trend.
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