Zimbabwe launches gold backed currency, locals 'sceptical'
Zimbabwe is trying to revive its economy with a new currency.
New Zimbabwean banknotes are displayed as Zimbabwe Reserve Bank Governer John Mushayavanhu (not seen) presents his monetary policy statement during which he announced the launch by the central bank of the ZiG (Zimbabwe Gold) a "structured currency" in Harare, 5 April 2024. Picture: AFP
Lester Kiewit speaks to Eddie Cross, Economist and Former Zimbabwe Reserve Bank Advisor.
Listen to the interview in the audio below.
The Zimbabwean government has overhauled its currency for the sixth time in recent years.
On 5 April, they introduced the ZiG, backed by $185 million worth of gold.
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One ZiG is worth 7 US cents.
This currency is fixed to the price of gold in an attempt to reduce its volatility.
Cross says Zimbabweans have little confidence in the authorities and are not automatically confident in this new currency.
“We have been through this rollercoaster so often in the past 10 years that Zimbabweans are sceptical.”
- Eddie Cross, Economist and Former Zimbabwe Reserve Bank Advisor
However, he says this is an intelligent response to the economic situation in the country as only a small quantity of ZiG has been issued.
Only around 10% of the market will be controlled by the ZiG and the rest will be supplied with US dollars.
“This is going to be interesting to watch.”
- Eddie Cross, Economist and Former Zimbabwe Reserve Bank Advisor
Scroll up to the audio player to listen to the interview.