Zimbabwe Launches ZiG Currency, Effective from April 8th, 2024

Zimbabwe's latest attempt to stabilize its economy took a stride forward on Monday (April 8th) as the country's new gold-backed currency, the Zimbabwe Gold (ZiG), commenced trading.

However, skepticism looms over whether this move, the nation's third currency overhaul in a decade, will be able to effectively combat the persistent issue of soaring inflation.

Announced by the central bank on Friday (April 5th), the ZiG debuted with an initial rate of 13.56 to $1, replacing the ailing Real Time Gross Settlement Dollar (RTGS), which had witnessed a drastic 80% devaluation this year, plummeting to 28,720 to $1 prior to the transition.

The Zimbabwe Stock Exchange (ZSE) promptly declared that starting from April 8th, ZiG would be the official trading currency, signifying a significant shift in the financial landscape.

Over the weekend, bank balances were seamlessly transitioned into the new currency, with a 21-day window granted to customers for the same.

Additionally, new ZiG banknotes are slated to enter circulation by month-end, as outlined by the Reserve Bank of Zimbabwe.

Justin Bgoni, CEO of the ZSE, emphasized that all share prices would now be denoted in ZiG, setting the stage for a comprehensive integration of the new currency into the financial markets.

In tandem with these developments, Zimswitch, the national payment platform, announced the operationalization of ZiG on Monday, further bolstering the currency's implementation across various sectors.

The central bank's decision to introduce the gold-backed currency comes as a response to the swift depreciation of the previous Zimbabwe dollar, highlighting the urgency to address the nation's economic instability.

Sources: Nyasha Chingono and Rachel Savage / Reuters & XINHUA / The East African