Zimbabwe's central bank is shaking things up with a brand new currency called ZiG (Zimbabwe Gold). The Reserve Bank of Zimbabwe's governor, John Mushayavanhu, rolled out the details during a press conference, revealing a currency backed by foreign cash, gold, and precious metals. Banks will swap their current Zimbabwean dollar balances into the fresh monetary system that launches on April 8.
The currency has some serious ambition. At kickoff, ZiG will hit the market at 13.56 per dollar with a hefty 20% interest rate. Mushayavanhu made it crystal clear he wants a rock-solid national currency and absolutely refuses to keep printing money like there's no tomorrow. The new bills will come in denominations of 1, 2, 5, 10, 50, and 100, with coins for half and quarter ZiG.
This marks Zimbabwe's sixth attempt to create a workable local currency since 2008 when hyperinflation cranked up to an astronomical 500 billion percent. The current Zimbabwean dollar has been on a wild ride, losing four-fifths of its value on the official market this year and becoming the world's second-worst-performing currency. More than 80% of transactions have been happening in dollars, with inflation racing up to 55.3% in March.
Mushayavanhu believes the inflation rate will cool down dramatically, expecting it to slide from 2% to 5% by year-end because of these currency changes. The new approach aims to stabilize prices and exchange rates by introducing a domestic currency backed by foreign exchange reserves, precious metals, and valuable minerals. Banks have 21 days to accept old notes, and the multi-currency system will remain active until 2030, according to law.
The currency has some serious ambition. At kickoff, ZiG will hit the market at 13.56 per dollar with a hefty 20% interest rate. Mushayavanhu made it crystal clear he wants a rock-solid national currency and absolutely refuses to keep printing money like there's no tomorrow. The new bills will come in denominations of 1, 2, 5, 10, 50, and 100, with coins for half and quarter ZiG.
This marks Zimbabwe's sixth attempt to create a workable local currency since 2008 when hyperinflation cranked up to an astronomical 500 billion percent. The current Zimbabwean dollar has been on a wild ride, losing four-fifths of its value on the official market this year and becoming the world's second-worst-performing currency. More than 80% of transactions have been happening in dollars, with inflation racing up to 55.3% in March.
Mushayavanhu believes the inflation rate will cool down dramatically, expecting it to slide from 2% to 5% by year-end because of these currency changes. The new approach aims to stabilize prices and exchange rates by introducing a domestic currency backed by foreign exchange reserves, precious metals, and valuable minerals. Banks have 21 days to accept old notes, and the multi-currency system will remain active until 2030, according to law.
