Zimbabwe's Bold Currency Plan: Building Trust with ZiG

Zimbabwe has launched its sixth local currency in 15 years, Zimbabwe Gold (ZiG), aiming to build trust by ensuring it is fully backed by reserves. Central Bank Governor John Mushayavanhu emphasizes the commitment to avoid past mistakes and gradually increase the use of ZiG in local transactions.

Zimbabwe's government remains committed to its promise of maintaining full backing for its new currency, Zimbabwe Gold (ZiG), ensuring it remains trustworthy, Central Bank Governor John Mushayavanhu told Reuters on Wednesday. This represents the nation's sixth attempt at a local currency over the past 15 years.

The previous currency, the Zimdollar, was abandoned after it plummeted 80% in just three months. The challenge now is to persuade the public to transition from foreign currencies. "Confidence can only come with us walking the talk," said Mushayavanhu, highlighting the plan to build up reserves and increase reliance on ZiG by 2030.

Currently, ZiG is used in 20% of local transactions, a figure the government hopes to elevate. However, there are reports of ZiG shortages, despite assurances of sufficient supply. The central bank has converted mining royalties to gold, targeting increased reserves by year-end. Mushayavanhu remains optimistic, anticipating an inflation rate aligned with IMF projections.

(With inputs from agencies.)