In an effort to address its ongoing currency crisis, Zimbabwe has introduced a new currency called ZiG. The country’s previous currency, the Zimbabwe dollar, has been struggling due to depreciation and rejection, leading to economic problems. The new currency is backed by gold reserves and a basket of foreign currencies and will officially be launched on Monday.
The Zimbabwe dollar has been under intense pressure in recent weeks, making it one of the worst performing currencies in the world. Its value has declined by over 70% on the official market since January, with further drops seen in the thriving black market. Inflation has also been on the rise, increasing to 55.3% in March from 26.5% in December the previous year.
Due to the rejection of lower denominations of the old currency, many traders only accepted payment in U.S. dollars, which are also legal tender in Zimbabwe. The Reserve Bank Governor, John Mushayavanhu, expressed concern that the local currency was losing ground as most transactions were being conducted in U.S. dollars. People have been given three weeks to exchange their old notes for the new currency.
This latest currency announcement is part of a series of measures taken by the Zimbabwean government to address currency issues since the collapse of the Zimbabwe dollar in 2009. The government had to temporarily scrap its currency and adopt the U.S