Zimbabwe issues gold-backed ZiG banknotes and coins, but mistrust remains high

Zimbabwe has issued physical banknotes and coins with a new gold-backed currency called ZiG, but most people remain skeptical of the country’s recent attempts to stabilize its currency.

The southern African country launched ZiG (Zimbabwe Gold) in digital format in early April.jigsufferedIt’s been a chaotic start, with most banks and digital payment providers struggling to support this.

The Reserve Bank of Zimbabwe (RBZ) recentlylaunchedZiG banknotes and coins had access restrictions. The weekly withdrawal limit for individuals is set at ZiG 3,000 ($225), while businesses can access $2,250.

However, local reports reveal that Zimbabweans remain unconvinced, despite assurances that the currency is backed by gold reserves and a basket of foreign currencies.

ZiG is currently in this countryofficial currency, most sellers prefer USD. Some refuse to accept ZiG despite threats of punishment.

A report by the Associated Press revealed that small traders are choosing to miss out on the new ZiG banknotes rather than accept them.

“We already have the official exchange rate and the depreciated black market rate, so we’ll wait a little bit to see what its real value is. The US dollar is still a safer bet,” said one trader. Ta.SaidA.P.

This uncertainty is best illustrated by the government’s decision to allow some businesses, such as gas stations, to reject Jig notes in favor of US dollars. But perhaps the biggest contradiction is that some government departments refuse to accept the new currency.

Gift Mugano, an economics professor at South Africa’s Durban University of Technology, says this contradiction will only add to the public’s fear and mistrust of the new currency.

“Governments are printing money, so they should be the first to accept that currency, and everyone else will follow. Otherwise, you’d be eating take-out and you’d never buy the money you made.” “If you’re cooking, you’re going to act like someone who wants other people to eat. It’s going to be questionable,” he pointed out.

New currency, same challenges

Zimbabwe has been battling currency instability for nearly two decades. In 2009,
hyperinflationThe central bank printed 100 trillion Zimbabwe dollar banknotes and Zimbabweans spent more than $500 million on a loaf of bread, a record high.

At that time, product prices were constantly changing. The situation got so bad that restaurants stopped displaying prices on menus because they changed by the time customers finished their meals.

This instability has caused a great deal of mistrust in the country’s central bank, and despite its best efforts, the RBZ has not been able to restore this trust. It also didn’t help that the government had issued five different currencies since 2009, all of which failed.

In the first month since its release, ZiG has lostIt trades 25% of its value against the US dollar on the black market. This comes despite a crackdown on illegal currency dealers, with dozens arrested and awaiting trial.

Still, the government has vowed to push ahead with the adoption of the new currency. President Emmerson Mnangagwa said on Monday that trusting ZiG was “a matter of national identity and dignity.”

Mr Mnangagwa has the support of Kenyan President William Ruto.Under East African leadership, local shillingsObtainedsignificantly against the US dollar.said“This radical revitalization of Zimbabwe’s monetary policy will make a significant contribution to the country’s economic recovery.”

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