The move is expected to help reduce inflation, the governor of the southern African nation’s central bank has said
Zimbabwe has introduced a new national currency aimed at stabilizing the economy and countering the devaluation of the local dollar in the southern African nation. Harare has also appealed to the United Nations for $2 billion in aid to help with food insecurity.
The ‘structured currency’ – Zimb Gold (ZiG) – will be anchored mainly on gold and foreign currency reserves, Zimbabwe’s Reserve Bank governor, John Mushayavanhu, announced on Friday while presenting the country’s 2024 monetary policy statement.
“With effect from today, banks shall convert the current Zimbabwe dollar balances to ZiG,” Mushayavanhu said, adding that it “will circulate with other currencies in the basket.”
He stated that the central bank would also implement a market-determined exchange rate.
“If we implement these measures, we expect them to have an impact on inflation,” the governor said.
The Zimbabwean dollar has depreciated against the US dollar every trading day this year and has weakened 72%, making it the world’s second-worst-performing currency, Bloomberg reported late last month. According to the Zimbabwe National Statistics Agency, the country’s annual inflation rate increased to a seven-month high of 55.3% in March, up from 47.6% in February. The rising costs of food and utilities, including housing, were the primary sources of the surge, the agency reported.
On Wednesday, the landlocked country declared a national state of disaster, with President Emmerson Mnangagwa stating that severe droughts will leave more than 2.7 million people without food this year.