Zimbabwe, plunged into a serious economic crisis for around twenty years, has adopted a new currency indexed to the price of gold to try to fight hyperinflation, the country’s Central Bank announced on Friday.
Starting today, banks will convert balances currently denominated in Zimbabwe dollars into the new currency called Zimbabwe Gold, ZiG, Central Bank Governor John told a news conference. Mushayavanhu.
Zimbabwe has one of the highest inflation rates in the world, officially 55% in March after reaching a three-digit rate last year.
The Zimbabwe dollar has lost almost 100% of its value against the US dollar over the past year. On Friday, it officially exchanged around 30,000 Zimbabwean dollars for one American dollar, 40,000 on the black market, according to the Zim Price Check observatory.
In 2008, hyperinflation reached such a level that the central bank issued a trillion dollar Zimbabwean note that has now become a collector’s item. The government was then forced to abandon the local currency, with the American dollar becoming the official currency.
The Zimbabwe dollar was revived in 2019. But most Zimbabweans prefer to continue using the American dollar, particularly for salaries and in the business world.
Local currency countries generally rush to exchange offices on payday to try to get ahead of an upcoming devaluation.
In addition to inflation, the approximately 15 million inhabitants are affected by widespread poverty, high unemployment and shortages of food, fuel and even medicines.