Zim uses gold-backed ZiG to pay for 40 pc of transactions

Bloomberg

The ZiG is the country’s sixth attempt at having its own functioning currency over the past 15 years and is backed by foreign currency reserves as well as the precious metal.

Zimbabweans are using the nation’s gold-backed currency for 40 percent of payments compared with 20 percent when it first started in April, Finance Permanent Secretary George Guvamatanga said.

The ZiG — an abbreviation for Zimbabwe Gold — is only circulating in electronic form, Guvamatanga told a meeting of economists Wednesday in the capital, Harare. While citizens continue to use the US dollar for most of their transactions, the government uses the ZiG for 80 percent of its trade, he said.

The southern African country introduced the ZiG on April 5, replacing the Zimbabwean dollar after it erased almost all its value against the greenback.

The ZiG is the country’s sixth attempt at having its own functioning currency over the past 15 years and is backed by foreign currency reserves as well as the precious metal.

Last month, Zimbabwe’s cabinet said it has approved a road map to abandon US dollars in favour of its bullion-backed currency in transactions.

President Emmerson Mnangagwa hinted at the possible adoption of the ZiG as the sole currency as early as 2026, ahead of an initial 2030 deadline — a proposal that bankers support. – © 2024 Bloomberg