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In line with the central financial institution, Zimbabweans have 21 days to change their outdated money for the brand new cash.
Zimbabwe's central financial institution has launched a brand new “structured foreign money” backed by gold, because it goals to sort out skyrocketing inflation and stabilize the nation's long-weak financial system.
The brand new foreign money – known as ZIM Gold (ZIG) – can be backed by foreign currency echange, gold and treasured minerals, Reserve Financial institution of Zimbabwe Governor John Mushayavanhu informed reporters within the capital Harare on Friday.
Mushayavanhu stated Zig will flow into with a basket of different currencies.
He stated the central financial institution would additionally introduce a market-determined change charge.
“Beginning immediately… banks will convert present Zimbabwe greenback balances into the brand new foreign money,” he stated.
He stated the transfer was geared toward selling “simplicity, certainty and (and) predictability” in Zimbabwe's monetary affairs, including that he launched the brand new banknotes which are available eight denominations starting from 1 to 200 ZiG.
The brand new notes depict gold ingots being minted, in addition to Zimbabwe's well-known Balancing Rocks, which already seem on older notes.
Zimbabweans have 21 days to change their outdated money for the brand new cash, Mushayavanhu stated.
Enough reserves to assist the brand new foreign money?
The Zimbabwe greenback has misplaced virtually one hundred pc of its worth in opposition to the US buck over the previous yr.
On Friday, it was formally buying and selling at round $30,000 in opposition to its extra prestigious US counterpart – and at $40,000 on the black market, in keeping with tracker Zim Value Test.
Its poor efficiency has contributed to the southern African nation's excessive inflation charge, which stood at 55 p.c in March after climbing nicely into triple digits final yr, in keeping with official information.
The present inflation charge has elevated the stress on the nation's 16 million individuals who already battle with widespread poverty, excessive unemployment and extreme drought induced by the El Nino climate sample.
The rising costs have additionally introduced again recollections of 2008, when inflation was so uncontrolled that the central financial institution even issued a $100 trillion word, which is now a collectors' merchandise.
Amid these financial challenges, analysts have questioned whether or not Harare has enough reserves to adequately assist the brand new foreign money, and whether or not Harare could face volatility in gold costs.
On Thursday, President Emmerson Mnangagwa inspected the central financial institution's safes, which Mushayavanhu – who was appointed earlier this yr – stated contained 1.1 tonnes of strong gold.
Mushayavanhu stated the financial institution additionally had about 1.5 tonnes overseas, in addition to $100 million in money and treasured minerals comparable to diamonds, which if transformed into gold would quantity to a different 0.4 tonnes.
Total, the reserves are valued at $285 million, which Mushayavanhu highlighted was “greater than thrice protecting the ZiG foreign money being issued”.
In the meantime, the central financial institution stated it might additionally pursue a decent financial coverage, linking cash provide progress to a rise in gold and overseas change reserves.