Zimbabwe’s Gold-Backed Currency ZiG Weakens Amidst Gold Price Decline

April 26, 2024
John Mushayavanhu | Report Focus News
John Mushayavanhu

Zimbabwe’s newly introduced gold-backed currency, the ZiG, experienced its first weakening since its launch earlier this month.

According to central bank data, the currency traded nearly 1% lower at 13.38 per dollar on Thursday compared to the previous day, reflecting the recent decline in gold prices, which have seen a downward trend over the past three days.

The ZiG, abbreviated for Zimbabwe Gold, is supported by a diversified portfolio of precious metals, including approximately 2.5 tons of gold and $100 million in foreign currency reserves held by the central bank.

Initiated at a trading value of 13.56 on April 8, the ZiG replaced the Zimbabwean dollar, which had suffered an approximate 80% devaluation against the US dollar since the beginning of the year.

During a business conference in Bulawayo on Wednesday, Zimbabwe’s Vice President Constantino Chiwenga highlighted the significance of the ZiG as a step towards reducing reliance on the US dollar within the economy. With plans to phase out the use of US dollars as legal tender by 2030, currently accounting for approximately 80% of transactions, the ZiG marks a strategic move towards greater economic autonomy for Zimbabwe.

As the country navigates its economic journey, the ZiG stands as a symbol of resilience and determination, embodying the nation’s commitment to forging a prosperous future on its own terms.