Zimbabwe will soon introduce a gold-backed digital currency aimed at stabilizing the local unit from its continued decline against the dollar, the state-run Sunday Mail reports, citing central bank governor John Mangodia.
The report said this would allow those with small amounts of Zimbabwean dollars to exchange their money for the digital currency to store value and hedge against currency fluctuations.
The token will help ensure that those with low amounts of coins can buy gold units “so that we leave no one and nowhere behind,” Mangudia told the Sunday Mail.
Last year, the South African country also introduced gold coins in a bid to get rid of excess liquidity and stabilize domestic unity. Officially, the local currency is trading at 1000.4 New Zealand dollars to the dollar. But it trades at S$1,750 on the streets of the capital.
Mangudia said the current fluctuations in the exchange rates resulted from expectations of an increase in the supply of foreign currency in the market when the tobacco auction season started in March. As reported by the Sunday Mail.
And yet, since the start of the auction season. Zimbabwe exported 54.9 kilograms of tobacco, valued at $307 million. During the same period last year, it shipped 57 million kilograms, valued at $295.5 million.
Zimbabwe abandoned its currency in 2009. It was mainly replaced by US dollars after a crisis of hyperinflation made domestic money worthless. The Zimbabwean dollar was reintroduced in 2019 in an effort to revive the sluggish economy. But the government decided in June to introduce legal US currency again to try to tame rampant price increases.
