In a latest bid to halt the serial fall of the local currency, Zimbabwe has replaced the Zimbabwe dollars with a new unit called the ZiG.
ZIG is for short ( Zimbabwe Gold)-it is backed by a basket of foreign currency and gold, the Zimbabwe’s Central Bank Governor, John Mushayavanhu, told journalists in Harare, the country’s state capital, on Friday.
Bloomberg reports that the new note would be launched on April 8 at an introductory level of 13.56 per dollar and a new interest rate of 20 per cent, as against the old rate of 130 per cent, which was the highest rate in the world.
The Central Bank Governor has vowed never to print currency in place of fiscal and structural reforms. He said “we want a solid and stable national currency in this country.
“It does not help to print money. Certainly under my watch it is not going to happen.”
The latest move is Zimbabwe’s sixth attempt to have a functional local currency since 2008, when inflation crossed 500 billion percent, according to International Monetary Fund estimates, rendering it worthless.
The plunging currency has led to more than 80% of transactions being done in US dollars and inflation quickening to 55.3% in March from 47.6% the prior month.
The currency changes are expected to cool annual inflation to between 2% and 5% by year-end and monthly to below 1%, the governor said.
President Emmerson Mnangagwa first hinted in February that his government will introduce a “structured currency.” The plan was delayed to give final touches.
Mushayavanhu, who took over as central bank governor on March 28 — a month earlier than the initial start date — pledged a return to more orthodox monetary policies.
“We are not going to be involved in any quasi-fiscal activities,” he said. “I have no intention to do other people’s jobs.”
