Can Zimbabwe’s ZiG win trust and replace the US dollar?
Summary
Zimbabwe is trying to get people to use its own currency, the Zimbabwe Gold (ZiG), more instead of the US dollar. The government hopes this will reduce reliance on the US dollar, but many Zimbabweans still do not trust the local currency after past problems with money losing value.Key Facts
- The Zimbabwe Gold (ZiG) currency was introduced in April 2024 and is backed by foreign currency reserves and gold.
- Zimbabwe stopped using its local currency in 2009 after hyperinflation and switched to a system using many currencies, mainly the US dollar.
- The local currency was brought back in 2018 but has been unstable, making people hesitant to use it.
- Inflation for the ZiG was reported at 3.7% annually as of May 2024.
- Many people, like teacher Charles Mbwandarikwa, quickly exchange ZiG to avoid losing value, due to previous currency collapses.
- Businesses find it hard to sell products in ZiG because most customers prefer to pay in US dollars.
- The Reserve Bank of Zimbabwe is encouraging a slow and voluntary shift to more ZiG use, depending on economic stability.
- Public trust in the currency depends on people believing it will keep its value and be useful for daily payments and savings.
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