Zimbabwe has launched a fresh gold-backed currency named ZiG, representing “Zimbabwe Gold,” in its ongoing efforts to stabilize an economy plagued by decades of turmoil. John Mushayavanhu, the central bank governor, revealed the new notes, emphasizing that ZiG’s value would be determined by the market. This move comes as a replacement for the RTGS Zimbabwean dollar, which has suffered a significant loss in value this year, with annual inflation hitting a seven-month high of 55% in March.
Residents have a 21-day window to exchange their old, inflation-ridden notes for the new currency, although the US dollar, preferred for 85% of transactions, will remain legal tender. ZiG banknotes will be available in denominations ranging from 1 to 200, with the introduction of coins intended to address the shortage of US coinage, often resulting in unconventional forms of change like candies or pens.
Mushayavanhu stressed that the implementation of the new currency would be immediate, requiring banks to convert existing Zimbabwe dollar balances into ZiG. He pledged to back the circulating local currency with equivalent value in precious minerals, primarily gold, or foreign exchange reserves, aiming to prevent the devaluation experienced by previous currencies.
Zimbabweans have a long-standing distrust of the central bank, rooted in the hyperinflation crisis of 2008 when Z$10 trillion notes were printed. Following the abandonment of its own currency, the country relied on foreign banknotes like the US dollar and South African rand. In 2016, the introduction of the bond note, purportedly on par with the US dollar, failed when the government resorted to excessive money printing, leading to its devaluation.
