Harare, Zimbabwe – After more than two months since its introduction, Zimbabwe’s latest currency has finally been assigned an official international currency code. This marks the southern African nation’s sixth endeavor to establish a stable monetary unit amid ongoing economic challenges.
The currency, now officially recognized with the code ZWG (Zimbabwe Gold), received this designation from the ISO 4217 Committee. This committee is responsible for the assignment of currency codes globally. The approval and subsequent code change from the temporary ZWL to ZWG became effective on June 25. The confirmation of this change was communicated through a letter from the Reserve Bank of Zimbabwe to the Bankers Association of Zimbabwe, a detail confirmed by representatives from both institutions.
The move to introduce ZiG, or Zimbabwe Gold, comes as part of Zimbabwe’s ongoing efforts to stabilize its economy and create a reliable and consistent monetary system. The country has faced a turbulent financial history, with hyperinflation leading to the abandonment of its previous currency in 2009. Since then, Zimbabwe has relied on a mix of foreign currencies, primarily the US dollar, until the recent introduction of the Zimbabwean dollar (ZWL) in 2019, and now the Zimbabwe Gold (ZWG).
The new currency is backed by gold reserves, which the government hopes will provide a more stable foundation and help restore confidence among both local and international stakeholders. The central bank’s decision to request the ISO 4217 code change is seen as a strategic move to enhance the currency’s credibility and facilitate easier international transactions.
Dr. John Mushayavanhu , the Governor of the Reserve Bank of Zimbabwe, expressed optimism about the future of the new currency. “The assignment of the ZWG code is a significant step in our ongoing efforts to establish a stable and trustworthy currency for Zimbabwe. We believe that backing our currency with gold reserves will provide the necessary stability and restore both domestic and international confidence in our monetary system.”
The introduction of ZiG is also part of broader economic reforms aimed at addressing the hyperinflation and liquidity issues that have plagued Zimbabwe’s economy. These reforms include measures to curb excessive money printing, improve fiscal discipline, and attract foreign investment.
The journey to a stable currency has been fraught with challenges. Zimbabwe’s previous attempts to introduce new currencies have met with varying degrees of success and skepticism. However, the current administration is hopeful that the gold-backed ZWG will stand the test of time and provide a more reliable economic foundation.
Economists and financial experts are watching closely to see how the new currency performs. Some express cautious optimism, noting that the backing of the currency with a tangible asset like gold is a positive step. Others, however, remain skeptical, pointing out that without broader economic reforms and measures to address underlying structural issues, the currency alone may not be sufficient to stabilize the economy.
The international community is also paying attention. The assignment of the ZWG code is expected to facilitate international trade and investment, as it provides a clear and recognizable identifier for the currency in global financial markets. This could potentially open up new avenues for economic cooperation and growth for Zimbabwe.
As Zimbabwe embarks on this new chapter with its latest currency, the eyes of the world are on how effectively the country can manage and sustain this initiative. The success of ZiG will depend not only on the stability provided by gold reserves but also on the government’s ability to implement and maintain sound economic policies.
For the people of Zimbabwe, the introduction of ZiG represents a glimmer of hope for economic recovery and stability. As they navigate the complexities of daily life amidst economic uncertainty, the effectiveness of ZiG in restoring financial stability will be a crucial factor in shaping the nation’s future.
More From Bloomberg
