Zimbabwe replaces the local dollar with a new currency.. What is it?
The new currency will be backed by a basket of foreign currencies, gold and other precious metals.
The Governor of the Central Bank, John Mushayavanhu, said in a press conference in the capital, Harare, today, Friday, that the “ZIG” currency will be launched on April 8, at an introductory price of 13.56 per dollar, and a new interest rate set at 20%.
This compares to 130% on the old unit, which was the highest interest rate for a central bank in the world.
Mushayavanhu added that the banks will convert their current balances in Zimbabwean dollars into “Zig,” and added, “We want a strong and stable national currency in this country.”
He added that the measure aims to enhance simplicity, confidence and predictability in Zimbabwe’s finances.
This sweeping step is the sixth attempt by Zimbabwe to obtain an effective local currency since 2008, when inflation exceeded 500 billion percent, according to International Monetary Fund estimates, rendering it worthless.
The current Zimbabwean dollar has lost four-fifths of its value on the official market since the beginning of the year, making it the second worst-performing currency in the world.
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