Reserve Bank of Zimbabwe Governor John Mushayabanhu issued a monetary policy statement in which he announced the creation of ZiG (Zimbabwe Gold) by the central bank. (Jekesai Nikizana/AFP)
- Zimbabwe's new currency is backed by 2.5 tonnes of gold and foreign exchange reserves worth approximately R5.4 billion.
- ZiG debuted stronger than the rand, but cannot be used to buy fuel in Zimbabwe.
- The Reserve Bank of Zimbabwe has vowed to end the rampant printing of the local currency.
Ziggy, son of the late Jamaican reggae icon Bob Marley, was trending in Zimbabwe over the weekend, not because of his music, but because of a joke aimed at Zimbabwe's new currency, Zimbabwe Gold (ZiG). Ta.
His name Ziggy rhymes with a currency abbreviation, while the pronunciation of his last name is similar to “Imari” and “Mari”, which mean money in the local Isindebele and Cishona languages.
The joke also includes a long-forgotten Zimbabwean pop music band, Zigzag Band. That's what the pessimists judged about the country's new currency.
“To be honest, I couldn't help but laugh. What they did was what they used to do: just cut out the zeros in the currency and present it as something new. Only this time, they We have given the currency a new name,” Tongai Dube said. , a junior high school mathematics teacher.
ZiG became the country's sixth currency since independence in 1980.
Read | Zimbabwe's new currency ZiG begins trading amid big doubts
Officials said the new currency would be backed by foreign currency and gold reserves held at the Reserve Bank.
Zimbabwe has 2.5 tonnes of gold and foreign exchange reserves worth about R5.4 billion, according to new Reserve Bank Governor John Mushayavanhu.
To gain confidence in ZiG, Mushayavanhu vowed to stop the culture of abusive money printing at the Reserve Bank of Zimbabwe (RBZ). The RBZ has caused hyperinflation in the past, destroying the local currency.
Physical notes are not yet available. It is scheduled to be released by April 30th.
However, once it became available in electronic form, the currency became stronger than the South African Rand.
Officially, by the end of the day on Wednesday, ZiG 1 was worth R1.83. However, the rand, along with the US dollar, plays a bigger role in Zimbabwe's economy than the ZiG.
For example, you cannot use ZiG to purchase fuel. He also cannot use ZiG to pay for his passport application, which is set at around R3,000 or US$170.
Read | Zimbabwe's new gold-backed currency suffers from a turbulent start
“The current pricing mechanism in the fuel sector will remain in place until it is reviewed separately,” the Reserve Bank of Zimbabwe (RBZ) said in a statement.
RBZ promised to make ZiG more attractive and internationally acceptable.
“ZiG is a nascent local currency and has not yet achieved convertibility. The Bank is committed to achieving full convertibility, consistent with the regional agenda of macroeconomic convergence under the SADC Financial Investment Protocol. “We will strive to strengthen the currency in order to strengthen the currency,'' the paper said. RBZ said.
Prior to the introduction of ZiG, the Zimbabwe dollar, also known as the Real Time Gross Settlement Dollar (RTGS), had lost 80% of its value and was trading at 1ZAR to RTGS 14,000.
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