Inflation-hit Zimbabwe launches new gold-backed currency

Zimbabwe has finally launched a gold-backed currency to bring down inflation, ending a decade of dollarization.

The new currency or Zig- standing for Zimbabwe Gold- is the latest attempt to end hyper-inflation in the country which lasted for 25 years.

Zig is intended to be a market-determined exchange rate, said Zimbabwe’s central bank governor while unveiling the new notes.

He said Zig was being used with immediate effect and banks convert current Zimbabwe dollars within 21 days as inflation hits 55% in March.

The central bank also said it was “recalibrating” its main interest rate and setting it at 20%, without elaborating, a drastic cut from the previous rate of 130%.