Zimbabwe Introduces Zim Gold Currency Backed by Gold Reserves

Zimbabwe‘s central bank has unveiled a new currency called Zim Gold (ZiG), backed by gold reserves and other precious minerals, in a bid to stabilize the country’s economy and combat soaring inflation rates. The announcement was made by the Reserve Bank Governor, John Mushayavanhu, in the capital city of Harare.

The Zim Gold currency will be supported by a variety of assets such as foreign currencies, gold reserves, and other precious minerals. Mushayavanhu also revealed that the new currency will coexist with a range of other currencies in circulation, aimed at bringing predictability and simplicity to Zimbabwe’s financial transactions.

The introduction of a market-determined exchange rate is part of the central bank’s strategy to enhance financial stability. Current Zimbabwe dollar balances will be converted to the new currency, with a transition period of 21 days for citizens to swap their old cash for the new Zim Gold notes.

Amidst economic challenges and hyperinflation concerns, President Emmerson Mnangagwa recently inspected the central bank’s vaults to verify its 1.1 tonnes of solid gold reserves. Furthermore, the bank holds additional gold reserves abroad and a substantial amount in cash and precious minerals, totaling a reserve value of $285 million.

The move to back the new currency with substantial gold reserves aims to instill confidence in the financial system and stabilize the volatile economy, which has been grappling with high inflation rates and economic turmoil. Analysts have raised questions about the sustainability of the new currency and its vulnerability to fluctuations in gold prices.

With the challenging economic backdrop and memories of the country’s historic hyperinflation period in 2008, the introduction of Zim Gold currency marks a significant attempt by Zimbabwe’s central bank to address ongoing economic challenges and restore financial stability.