ZiG Records Its Largest Decline Since Launch
Zimbabwe’s currency, Zimbabwe Gold (ZiG), on Monday, 06 May, weakened to its lowest level against the US dollar since it was launched last month, reported Bloomberg.
According to data posted on the Reserve Bank of Zimbabwe’s website, ZiG was trading at 13.67 to the dollar, a decline of 0.8% from its first day of trading at 13.56 per dollar on April 8.
The ZiG is the country’s sixth attempt to deliver a functioning local currency since 2008.
Authorities say the currency is backed by 2.5 tons of gold and $100 million in foreign currency reserves held by the central bank.
In an interview with Bloomberg on May 2, the Minister of Finance, Economic Development and Investment Promotion Mthuli Ncube said that the government will seek full convertibility of the unit at some stage to further boost its appeal.
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RBZ Deputy Governor Innocent Matshe was reported as saying the first steps of achieving convertibility may include engaging with Zimbabwe’s largest trading partners to accept payment in the new currency.
South Africa is Zimbabwe’s largest trading partner and accounted for almost 35% of exports in March. Mozambique and Zambia, which are also Zimbabwe’s neighbours, are other key trading partners.
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