Zimbabwe’s ZiG Currency Trading Commences Amid Lingering Uncertainty
Zimbabwe’s latest attempt to stabilize its economy began on Monday with the introduction of the new gold-backed currency, ZiG, amidst skepticism and economic challenges.
The Reserve Bank of Zimbabwe unveiled ZiG as a replacement for the struggling Real Time Gross Settlement Dollar (RTGS), which had experienced significant devaluation, trading at 28,720 to $1 before the transition.
Bank balances were automatically converted into ZiG currency over the weekend, with customers given a 21-day window to complete the process.
The new ZiG banknotes, available in denominations ranging from 1 to 200, are set to enter circulation by the end of the month.
Despite the central bank’s assurances that ZiG is “structured” and backed by a mix of foreign currency and precious metals, including gold, concerns persist about its stability and acceptance.
With annual inflation exceeding 55% in March, doubts linger about whether ZiG can curb hyperinflation fears reminiscent of the Robert Mugabe era.
While commercial banks have begun using the new official exchange rate, the extent of ZiG’s adoption by businesses and citizens remains uncertain.
Presently, the majority of transactions in Zimbabwe are conducted in foreign currencies, highlighting the challenges ahead for ZiG’s acceptance and value retention.
