The ZiG: All about Zimbabwe’s new gold-backed currency | What Is News

Transition from Zimbabwean Dollars to ZiG Banknotes and Coins:

Zimbabwe has grappled with high inflation, with rates surpassing 500% in recent years. Consequently, the Zimbabwean dollar, introduced in 1980, lost its value due to hyperinflation. Following this, the country relied on various currencies, primarily the US dollar, leading to limited control over its economy.

As Zimbabwe has long struggled with inflation, it has introduced its sixth currency ZiG to navigate the same. (Source: Reserve Bank of Zimbabwe report)

The collapse of the Zimbabwean dollar in 2009, with hyperinflation peaking at 5 billion per cent, marked one of the most severe currency crashes in history. The ZiG, now the sixth currency used by Zimbabwe, has been in circulation since April 5, 2024.

Banks in Zimbabwe have been converting the previous national currency, the Zimbabwe dollar, into ZiGs, aiming to promote simplicity, certainty, and predictability in monetary and financial matters, Additionally, will circulate alongside other foreign currencies in the economy.

Key features of ZiG:

Zimbabwe has introduced its sixth new currency, named the ZiG. (Source: AP)

The ZiG stands out as a new currency backed by gold reserves, ensuring its value is supported by the physical gold held by the government. ZiG notes and coins will be available and issued in denominations: 1ZiG, 2ZiG, 5ZiG, 10ZiG, 20Zig, 50ZiG, 100ZiG, and 200ZiG, with the gold backing aims to provide stability and prevent currency devaluation.

The ZiG signifies Zimbabwe’s shift away from past economic challenges towards a more secure monetary future by establishing a stable foundation to control inflation, stimulate economic growth, and restore public trust in Zimbabwe’s financial system after years of currency instability.

In essence, as Zimbabwe introduces this new gold-backed currency, the effectiveness of the ZiG in mitigating economic instability, rebuilding public trust in the monetary system, and fostering long-term economic growth and prosperity remains to be seen, as success will rely on robust economic policies, political stability, and the commitment of the government and central bank to uphold fiscal discipline and transparency.