Zimbabwe Launches New Currency Amid Economic Turmoil

On Friday, Zimbabwe introduced a new currency, ZiG, to stabilize its economy and replace the previously depreciating currency, which faced rejection by its citizens.

This measure, announced by Reserve Bank of Zimbabwe Governor John Mushayavanhu, aims to mitigate the nation’s currency crisis, part of its prolonged economic challenges. The ZiG currency, pegged to gold reserves and various foreign currencies, will be launched on Monday, addressing the Zimbabwe dollar’s significant loss of over 70% of its value since January.

This depreciation has been more pronounced on the black market, despite the official market’s struggles. Inflation rates have soared, with a sharp increase from 26.5% in December to 55.3% in March. The population’s preference for the U.S. dollar over lower denominations of the local currency has underscored the crisis. Mushayavanhu highlighted this strategy as a bid to save the local currency, noting that a majority of transactions had shifted to the U.S. dollar. Citizens have three weeks to exchange their old currency for ZiG.

This step is part of Zimbabwe’s ongoing efforts to stabilize its currency, following the catastrophic collapse of the Zimbabwe dollar in 2009, which led to the temporary adoption of the U.S. dollar. After reintroducing a local currency in 2016, Zimbabwe faced renewed instability, prompting fluctuating policies on foreign currency use, underscoring the challenging journey towards economic stability.