Zimbabwe abandons local dollar, launches gold-backed currency ‘ZIG’

Zimbabwe abandons local dollar, launches gold-backed currency ‘ZIG’

Zimbabwe has launched a new gold-backed currency, ZiG, marking a significant move away from the struggling Zimbabwean Dollar. The launch was schedu

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Zimbabwe has launched a new gold-backed currency, ZiG, marking a significant move away from the struggling Zimbabwean Dollar.

The launch was scheduled for today Monday, April 8, with an initial exchange rate set at 13.56 ZiG per US dollar.

The announcement, made by Zimbabwean Central Bank Governor John Mushayavanhu in Harare, emphasized the need for a stable national currency, supported by a robust backing of foreign currencies, gold, and other precious metals.

This transition follows years of economic turmoil, with Zimbabwe’s currency losing substantial value.

The new currency aims to address this challenge, backed by a diverse basket of assets to bolster stability.

Mushayavanhu highlighted the ineffectiveness of excessive money printing, a practice that has plagued Zimbabwe’s previous attempts to stabilize its currency.

He expressed a commitment to responsible monetary policies under his leadership.

He stated, “We want a solid and stable national currency in this country. It does not help to print money. Certainly, under my watch it is not going to happen.”

The decision to introduce ZiG comes amidst the Zimbabwean Dollar’s recent decline, losing approximately 80 percent of its value in official markets this year, ranking it among the world’s weakest currencies.

As a result, the US dollar has become the primary currency for most transactions within Zimbabwe.

Meanwhile, President Emmerson Mnangagwa‘s administration signaled its intent to introduce a more structured currency earlier this year, potentially backed by gold, as suggested by Finance Minister Mthuli Ncube.

This strategy required fine-tuning, leading to the delay of the central bank’s monetary policy statement.

However, Mushayavanhu’s assumption of office, a month ahead of schedule on March 28, further highlights the government’s commitment to implementing an orthodox monetary policy to tackle economic challenges and restore confidence in Zimbabwe’s financial system.