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Zimbabwe to move to gold-backed currency amid economic challenges
(MENAFN) The Zimbabwean government has recently announced the approval of a strategic plan to transition from using the US dollar to adopting a new gold-backed currency, named the Zig, for all transactions within the country. This significant shift in monetary policy is anticipated to be officially unveiled by Finance Minister Mthuli Ncube in the coming week, as indicated by a Treasury spokesperson. During a press conference in Harare, Information Minister Jinfan Muswere detailed the government's roadmap for de-dollarization, which outlines the operational framework for the Zig currency to function as legal tender in the Zimbabwean economy. The move aims to stabilize the country's financial system and reduce dependency on foreign currency.
The Zig currency, introduced on April 8, derives its name from the English words "Zimbabwe gold," reflecting its foundation on the nation's gold reserves. This initiative marks Zimbabwe's sixth attempt to establish a viable local currency since 2008 when hyperinflation reached an astronomical rate of 500 billion percent, as estimated by the International Monetary Fund. The previous attempts have struggled to achieve long-term success, with each new currency eventually succumbing to severe devaluation. Despite these challenges, the government remains committed to creating a stable and reliable monetary system through the implementation of the Zig currency.
Zimbabwe's economic landscape has been fraught with instability, with the old Zimbabwe dollar losing four-fifths of its value in the official market since the beginning of the year. This dramatic depreciation has positioned the Zimbabwe dollar as the second-worst performing currency globally. The introduction of the Zig currency is seen as a critical measure to counteract these economic difficulties and restore confidence in the national financial system. By leveraging the country's gold resources, the government hopes to create a more resilient and trustworthy currency that can withstand external shocks and internal pressures, paving the way for economic recovery and growth.
The Zig currency, introduced on April 8, derives its name from the English words "Zimbabwe gold," reflecting its foundation on the nation's gold reserves. This initiative marks Zimbabwe's sixth attempt to establish a viable local currency since 2008 when hyperinflation reached an astronomical rate of 500 billion percent, as estimated by the International Monetary Fund. The previous attempts have struggled to achieve long-term success, with each new currency eventually succumbing to severe devaluation. Despite these challenges, the government remains committed to creating a stable and reliable monetary system through the implementation of the Zig currency.
Zimbabwe's economic landscape has been fraught with instability, with the old Zimbabwe dollar losing four-fifths of its value in the official market since the beginning of the year. This dramatic depreciation has positioned the Zimbabwe dollar as the second-worst performing currency globally. The introduction of the Zig currency is seen as a critical measure to counteract these economic difficulties and restore confidence in the national financial system. By leveraging the country's gold resources, the government hopes to create a more resilient and trustworthy currency that can withstand external shocks and internal pressures, paving the way for economic recovery and growth.
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