Zimbabwe’s new gold-backed currency is designed to fight inflation and wean the economy off the US dollar, but it has suffered a chaotic start with shops accepting only US dollars on Tuesday and Zimbabweans queuing up outside banks for hours to access their savings.
The ZiG – short for Zimbabwe Gold – officially started trading on Monday, just days after the country’s central bank announced it would replace the Zimbabwean dollar, which has tumbled in value over the past year.
In March, inflation reached a seven-month high of 55 percent.
It’s Zimbabwe’s sixth attempt at creating a new currency since 2008, and many in the country were not prepared for the switch.
Most banks had their systems offline on Tuesday, as they worked to transition them to ZiG.
This caused long queues outside some branches in the capital Harare, with hundreds of people waiting for hours to withdraw cash or access their funds.
Worthless overnight
The currency swap saw old banknotes – already of little value – become worthless overnight.
In the Harare suburb of Kambuzuma, children played in the streets with wads of cash.
Other notes laid abandoned on the pavements of the central business district, no one stopping to pick them up.
Getting hold of new ones was impossible.
On Saturday, the central bank said they were still being printed and would become available only on 30 April.
Push for local currency
But some financial experts have expressed doubts that ZiG is the solution.
(with newswires)
Read also:
Zimbabwe’s democracy faces new challenges with Nelson Chamisa’s exit
Senegal’s opposition hopes promise of new national currency will win votes
The deadly quest by Zimbabwe’s poorest for a few grams of golden hope
