Zimbabwe has announced the launch of a new currency named the Zimbabwe Gold (ZiG) which will be effective from next week Monday, following the collapse of the Zim dollar.

New Reserve Bank of Zimbabwe Governor John Mushayavanhu said the ZiG will replace the last bit of the Zim dollar, and will be backed by a select group of foreign currencies, gold and other precious metals the country produces.

The new currency will be introduced next Monday at 13.56 per U.S Dollar.?With effect from 5 April 2024, banks shall convert the current Zimbabwe dollar balances into the new currency which shall be called Zimbabwe Gold to foster simplicity, certainty, and predictability in monetary and financial affairs. The new currency will co-circulate with other foreign currencies in the economy,"said Mushayavanhu.

Zimbabwe's dollar had lost almost three quarters of its value against the Dollar since it?s relaunch last year, stoking inflation which was measured at 55.3 percent in March versus 47.6 percent the month before. 

To protect the value of the new currency, Mushayavanhu said he would limit Central Bank lending to the government, a key source of the inflation that engulfed the economy in 2008.

Gerald Mwandiambira the CEO of Sugar Creek Wealth said this move won?t make much of a difference in the lives of ordinary Zimbabweans.

"To ordinary Zimbabweans this is just another currency because most of them don?t use the local currency in circulation. This also speaks to what the Central Bank needs to achieve, which is to bring back confidence in themselves and the government that backs them. For example, the government itself uses the local currency as its sole currency as a means to prevent hyper inflation like the 100 trillion dollar note which they had three years ago which now amounts to 300 dollars," said Mwandiambira.

He added that in reality this new currency means nothing to people on the ground until trust is re-established between the Central Bank, the people and the government."For the country when you?re using your own currency it's better to run your economy as opposed to using someone else's currency and this should be highly normalised as soon as possible.The Central Bank needs to prove that they can sustain the currency. The positive outlook for this move is that Zimbabwe has pulled through and maintained its currencies through tough times,"he said.