Zimbabwe Introduces Gold-Backed ZiG Currency as Old Dollar Notes Cease Circulation

Zimbabwe has introduced a new gold-backed currency called the Zimbabwe Gold (ZiG) to replace the old Zimbabwean dollar notes, which has now ceased to circulate.

The Reserve Bank of Zimbabwe Governor, John Mushayavanhu, unveiled the new currency on April 5, giving the public 21 days to exchange their old, inflation-battered Zimbabwean dollar notes for the ZiG.

The launch of the ZiG is part of the government's bold decisions and economic recovery agenda under President Emmerson Mnangagwa's leadership. Kenyan President William Ruto, who officially opened the Zimbabwe International Trade Fair, praised Zimbabwe's resilience, commitment to regional integration and trade, and the introduction of the ZiG currency backed by the country's vast natural resources.

"The introduction of the ZiG currency, backed by Zimbabwe's vast natural resources, will contribute greatly to the country's economic resurgence," Ruto noted.

The ZiG has been strengthening against the U.S. dollar since its launch, with the exchange rate improving from 13.56 per U.S. dollar on April 5 to 13.42 per U.S. dollar by the end of Friday's trading, supported by firming gold prices. Most businesses have completed their configuration systems to conduct business in ZiG, and major companies like Fastjet Zimbabwe and Air Zimbabwe have already started accepting the new currency for ticket purchases.

Why this matters: The introduction of the ZiG is seen as a significant step towards economic recovery and combating the dominance of the US dollar in Zimbabwe. With the country's untapped reserves of precious metals representing tremendous wealth, the gold-backed currency aims to stabilize the economy and protect citizens from currency fluctuations and high inflation.

The Reserve Bank of Zimbabwe will begin distributing the new ZiG banknotes and coins to commercial banks on April 29, with the public able to start withdrawing cash from their accounts on April 30. The ZiG is backed by a combination of gold, precious minerals, and foreign currency reserves. Governor Mushayavanhu has appealed to Members of Parliament to educate their constituents on the new currency, urging them to "sell the new currency to their communities and provide them with QR codes to gauge public perception."

Key Takeaways

• Zimbabwe introduces new gold-backed currency, ZiG, to replace Zimbabwean dollar.
• ZiG launch part of govt's economic recovery agenda under President Mnangagwa.
• ZiG strengthening against USD, supported by firming gold prices.
• ZiG aims to stabilize economy, combat US dollar dominance in Zimbabwe.
• RBZ to distribute ZiG banknotes and coins to banks starting April 29.