Zimbabwe’s central bank has introduced a new ‘structured currency’ supported by gold, aiming to address rampant inflation and bring stability to the country’s struggling economy.
Zimbabwe’s Reserve Bank governor, John Mushayavanhu, announced in Harare on April 5 2024 that the new currency, named Zim Gold (ZiG), will have backing from foreign currencies, gold, and precious minerals.
According to reports, the Central Bank’s vaults hold 1.1 tonnes of solid gold. It also has almost 1.5 tonnes more abroad, as well as $100 million in cash and precious minerals – such as diamonds, that if converted into gold would account for another 0.4 tonnes.
Altogether, the reserves’ value totals $285 million, which according to Mushayavanhu, was ‘more than three times cover for the ZiG currency being issued.’
The Governor also said ZiG will operate alongside a variety of other currencies and that the central bank would implement a market-determined exchange rate.
“With effect from today … banks shall convert the current Zimbabwe dollar balances into the new currency,” he said.
The intention behind this initiative is to promote ‘simplicity, certainty, [and] predictability’ in Zimbabwe’s financial landscape. He unveiled the new banknotes which are available in eight denominations ranging from one to 200 ZiG.
Zimbabweans have 21 days to convert their old Zimbabwe dollars (ZwL) into new money, Mushayavanhu said.
The Zimbabwean dollar has lost almost 100 percent of its value against the US greenback over the past year. On April 5 2024, it was officially trading at about 30,000 against its more coveted US counterpart – and at 40,000 on the black market, according to tracker, Zim Price Check.
Since its re-introduction in 2019, after being abandoned a decade earlier due to hyperinflation, the Zimbabwean authorities have made several attempts to stabilize the Zimbabwe dollar.
These efforts have included initiatives such as introducing gold coins and digital tokens backed by bullion, incidentally also known as ZiG, which was introduced as a means of exchange in October 2023.
🇿🇼 LAUNCH | Zimbabwe Introduces the ZiG Gold-Backed Digital Currency for Use as a ‘Means of Payment for Domestic Transactions’
The gold-backed digital tokens, held in either e-gold wallets or e-gold cards, will be tradable and capable of facilitating person-to-person (P2P) and… pic.twitter.com/ikgAyFMad1
— BitKE (@BitcoinKE) October 10, 2023
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