Zimbabwe unveiled its new gold-backed currency, the Zimbabwe Gold (ZiG), which officially entered circulation this Tuesday. This move follows the country’s decision to discard the Zimdollar earlier this month due to its drastic depreciation against the U.S. dollar, losing over 70% of its value.
ZiG, supported by gold, other precious minerals, and the U.S. dollar, began trading at 13.4 to the dollar, maintaining stability similar to previous levels in the formal market. The launch sparked long queues at banks and ATMs, with citizens also utilizing the new currency for purchases in supermarkets.
While some Zimbabweans remain skeptical about ZiG, others like Melda Mudavanhu, a 50-year-old civil servant, express optimism, believing that supporting the new currency is crucial for its success and welcoming the removal of money changers.
In anticipation of ZiG’s introduction, authorities cracked down on illegal foreign currency trading, accusing dealers of exploiting the new currency’s exchange rates against the greenback. The Reserve Bank of Zimbabwe imposed a daily withdrawal limit of ZiG 3,000 per individual to manage the money supply, with approximately ZiG 80 million currently in circulation.
The central bank’s Monetary Policy Committee affirmed its commitment to maintaining a stringent monetary policy stance to support ZiG’s stability. Despite being Zimbabwe’s fourth attempt at currency reform in a decade, ZiG has demonstrated stability in the formal market since its rollout.
