This move comes after years of economic turmoil, with Zimbabwe experiencing one of the world’s highest inflation rates. Officially, it reached 55% in March, following triple digits the year before.
“From today, banks will convert balances in Zimbabwean dollars to ZiG,” declared Central Bank Governor John Mushayavanhu at a press conference.
The Zimbabwean dollar has lost significant value. Over the past year, it depreciated 100% against the US dollar, officially trading at 30,000 ZWD to 1 USD. The black market rate is even worse, at 40,000 ZWD to 1 USD (according to Zim Price Check).
This isn’t the first time Zimbabwe has grappled with hyperinflation. In 2008, the crisis peaked, forcing the government to abandon its currency and adopt the US dollar.
However, the Zimbabwean dollar was reintroduced in 2019. Despite this, many Zimbabweans prefer US dollars for salaries and business transactions. Those paid in local currency often rush to exchange it on payday, fearing further devaluation.
Zimbabwe’s economic woes extend beyond inflation. The 15 million strong nation faces widespread poverty, high unemployment, and shortages of basic necessities like food, fuel, and medicine.
The success of the ZiG remains to be seen. Only time will tell if it can stabilize the economy and regain the trust of the Zimbabwean people.
AFP/fss/abj/APA