Zimbabwe Launches New Gold-Backed Currency to Stabilize Economy

Zimbabwe's central bank has launched a new currency called Zim Gold (ZiG) backed by gold, foreign currencies, and minerals to stabilize the economy and curb high inflation.

The ZiG will circulate alongside other currencies. Banks must convert Zimbabwe dollar balances into ZiG in the next 21 days.

The move aims to bring simplicity, certainty and predictability to Zimbabwe's financial system. The ZiG comes in 8 denominations from 1 to 200.

Analysts question if Zimbabwe has enough reserves to adequately back the ZiG and prevent volatility from gold price fluctuations.

The central bank says it has over 1 tonne of gold reserves, along with other precious minerals, cash and foreign currencies totaling $285 million in value to back the ZiG.