Zimbabwe issues another new currency to battle inflation
Perpetually economically ravaged Zimbabwe, where the annual inflation rate was 55.3% in March, is once again issuing a new currency. This time it is called the ZiG, and it was announced by the Reserve Bank of Zimbabwe on April 5. Although the introduction was to be on April 8, the ZiG was not readily available unless electronically. The physical currency was delayed until April 30.
Those holding the Zimbabwe dollar are being given 21 days to convert them. The new currency comes after the Zimbabwe dollar lost over 70% of its value in the first three months of 2024. The Reserve Bank made special arrangements for those without bank accounts to swap their notes and coins at designated outlets.
The new currency is said to be gold-backed, hence the name “ZiG” for Zimbabwe Gold. It is being issued in 1, 2, 5, 10, 20, 100 and 200 denominations, a ZiG half, and a quarter. The starting exchange was a rate of US$1: ZiG 13.56. The Reserve Bank calls the ZiG a “structured currency,” in that it is anchored by a composite basket of foreign currency and precious metals, mainly gold, held as reserves for this purpose by the bank. As of April 5, 2024, the bank claimed reserve assets of 100 million U.S. dollars in cash and 2,522 kilograms of gold.
The multicolored, 155 x 65 mm notes are printed on cotton paper and retain the traditional obverse featuring the three Chiremba balancing rocks in Epworth, with the Zimbabwe bird on the upper left-hand side. The reverses reflect the gold-backing of the currency by showing the minting process with molten gold pouring from a crucible into a mold on top of stack of a dozen ingots.
The new currency is being greeted with skepticism. The Institute for Security Studies said, “Zimbabwe’s new ZiG doomed by overall lack of transparency.”
Voice of America said on April 16 that the ZiG was trading officially at 13.41 to the dollar but was already at 20 on the black market.
The U.S. dollar accounts for 85% of transactions in Zimbabwe and will remain legal tender. Most people are likely to continue to prefer this, according to the BBC.
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