Zimbabwe introduces new currency

Zimbabwe has unveiled a new currency, ZiG, aiming to tackle the ongoing economic turmoil fueled by currency depreciation and high inflation. The move comes as the country grapples with years of economic difficulties.

Reserve Bank of Zimbabwe Governor John Mushayavanhu announced that ZiG will be backed by gold reserves and a mix of foreign currencies, taking effect from Monday.

In recent months, the Zimbabwe dollar has faced severe devaluation, becoming one of the world’s poorest performing currencies. Its value plummeted by over 70% on the official market since January, with inflation soaring to 55.3% in March.

Many traders have been reluctant to accept lower denominations of the old currency, preferring U.S. dollars. Mushayavanhu emphasized the need to preserve the local currency’s value, as most transactions are already conducted in U.S. dollars.

People have three weeks to exchange old notes for the new currency. This move follows a series of currency measures implemented since the dramatic collapse of the Zimbabwe dollar in 2009, including the temporary adoption of the U.S. dollar.

Despite efforts to stabilize the currency, volatility persisted, prompting shifts in currency policy, such as the banning and subsequent unbanning of foreign currencies for domestic transactions.

Zimbabwe’s currency struggles reflect broader economic challenges, and the introduction of ZiG represents another attempt to navigate these turbulent waters.