Zimbabwe’s central bank launched a new “structured currency” backed by gold on Friday, as it seeks to tackle sky-high inflation and stabilise the country’s long-floundering economy.
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, Reserve Bank governor John Mushayavanhu said.
“With effect from today… banks shall convert the current Zimbabwe dollar balances into the new currency,” he said presenting 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.
Advertisement – Scroll to Continue
The Zimbabwean dollar has lost almost 100 percent of its value against the US greenback over the past year.
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.
Advertisement – Scroll to Continue
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.
str-ub/cw
