Local Currency That Challenged the US Dollar Fails, Dips 40%
Zimbabwe had recently launched a new currency named ZIG which was backed by gold. The gold-backed ZIG local currency was launched in April this year to reduce the circulation of the US dollar in Zimbabwe. The government took a risk and floated the currency across all sectors for transactions in the country. Also Read: Russia’s Push: Precious Metals to Lead De-Dollarization Effort ZIG gained significant support a month after its launch, with over 40% of all payments settled in the new currency. While Zimbabweans settled 40% of all costs in ZIG, the government paid 80% of all transactions in the gold-backed currency. The government and its people worked hand-in-hand to make the new local currency successful, threatening the US dollar. Nonetheless, things have not gone as planned. ZIG lost nearly half its value in Q4 of 2024. The local currency struggles to keep up with the US dollar in central cities and remote towns. ZIG, touted as a solution to tame the financial crisis, has created it...