Zimbabwe Gold (ZiG) Chaos: Currency Swap Sparks Panic in Harare

Zimbabwe’s new gold-backed currency, Zimbabwe Gold (ZiG), has started trading, causing chaos and long queues outside banks in Harare. The currency swap saw old banknotes become worthless overnight, with some people left stranded as Harare public transport operators refused to accept Zimbabwean dollars, charging a pricey flat fare of $1.

Many stores and street vendors also accepted only greenbacks, giving out biscuits or candies as change due to a shortage of coins. The central bank hopes the ZiG, backed by a basket of reserves comprising foreign currency and precious metals, mainly gold, would help stabilize the long-floundering economy. The Zimbabwean dollar has lost almost 100% of its value against its US counterpart over the past year, leading to sky-high inflation.

Soaring prices have piled pressure on Zimbabwe’s 16 million people, who already face widespread poverty, high unemployment, and a severe drought induced by the El Nino weather pattern. The central bank hopes the ZiG, backed by a basket of reserves comprising foreign currency and precious metals, will help stabilize the long-floundering economy.