Zimbabwe’s Ministry of Finance announced on Tuesday that the newly introduced gold-backed currency, known as the Zimbabwe Gold (ZiG), is now the nation’s official unit for all financial transactions.
The government is set to enforce new regulations to ensure that businesses comply with the official exchange rate.
The ZiG, introduced in early April, has shown stability in official markets, but its acceptance in the parallel market has been challenging.
Traders are selling U.S. dollars at a premium, about 65% above the official rate, indicating a significant divergence from government-set values.
This disparity has extended to some supermarkets, where a premium is charged for purchases made in ZiG. Informal traders are largely rejecting the currency altogether.
Finance Minister Mthuli Ncube addressed these issues in a recent statement, saying, “To ensure orderly pricing, the Government will soon be introducing the necessary regulations to ensure that no exchange rate other than the official rate will be used for the pricing of all goods and services.”
@ZimTreasury Press Statement on transition from ZWL to the new Zimbabwe Gold (ZiG) currency: Measures to promote market adoption and acceptance pic.twitter.com/c20vTe2Lq1
— MOFED&IP (@ZimTreasury) May 7, 2024
To stabilize the currency, authorities have recently launched a crackdown on illegal foreign currency trading, demonstrating their commitment to upholding the ZiG’s value.
The government has made several attempts at establishing a stable national currency in recent years.
This is the fourth effort in a decade, with Zimbabwe having discontinued the Zimbabwean dollar last month after it depreciated by 70% since the beginning of the year.
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