ZIMBABWE LAUNCHES NEW GOLD-BACKED CURRENCY

 

Zimbabwe once again turns its economy around, its new gold-backed currency entered circulation on Tuesday, April 30 under the promise of its economic authorities to keep the money supply under control while they fight to contain inflation.

Notably, Zimbabwe dumped the Zimdollar earlier this month after it lost more than 70% of its value against the US dollar.

Zimbabwe's new currency (ZiG), is backed by gold, other precious minerals and the US dollar. On Tuesday it was trading at 13.4 per dollar, with little change from previous levels in the formal market.

Immediately hundreds of people crowded the banks and automated teller machines (ATM) while another sector of the population used the new currency to purchase groceries in the city's supermarkets.

While some Zimbabweans have expressed distrust about the new currency, others like Melda Mudavanhu, a 50-year-old civil servant, remain optimistic.

"If we support the currency as it is the first of its kind, this currency will be successful. Getting rid of the money changers is also welcome because they were a threat," Mudavanhu said.

Before the introduction of the ZiG, authorities arrested illegal currency traders, accusing them of charging a premium to the ZiG against the dollar.

The Reserve Bank of Zimbabwe on Monday set 3,000 ZiG as the daily withdrawal limit for individuals as it tries to contain the money supply.

According to the central bank, a total of 80 million ZiG are currently on the market.

The central bank's Monetary Policy Committee on Monday pledged to support a tight monetary policy stance.

The ZiG, Zimbabwe's fourth attempt at monetary reform in a decade, has remained stable in the formal market since its introduction.