Paying in Stones

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Zimbabwe has introduced a new currency, in an effort to resolve the years-long currency crisis and economic troubles plaguing the southern African country, the Associated Press reported.

Last week, the government issued banknotes and coins of the ZiG – short for “Zimbabwe Gold” – nearly a month after it launched the new currency electronically.

The ZiG is backed by the country’s gold reserves and marks the latest effort by the Zimbabwean government to stop the nation’s long-running currency problems: Officials previously suggested a series of proposals to replace the Zimbabwean dollar, including introducing gold coins and also a digital currency.

Observers noted that it is the sixth currency that Zimbabwe has used since the 2009 collapse of the Zimbabwean dollar amid severe hyperinflation that has reached at times five billion percent. The hyperinflation resulted in the issuing of a 100 trillion Zimbabwe dollar banknote, volatile price changes and the use of the US dollar in the local economy.

Today, the US dollar is still used by Zimbabweans to pay for a variety of goods and services, such as rent, school fees and groceries. Locals often take their local currency earnings and exchange them for US dollars on the black market because banks do not issue the currency.

Following the launch of the ZiG, while officials expressed hope for the new currency as it is backed by the country’s gold reserves, many Zimbabweans remain unconvinced about it, with even some government departments refusing to accept it.

Still, the government is pushing businesses and citizens to use the new currency, including arresting more than 70 street forex dealers since the ZiG’s introduction, Al Jazeera added.

Authorities blame the black market dealing for distorting the currency exchange rate. Despite government crackdowns, many dealers have gone underground and found creative ways of continuing their trade, including using WhatsApp to find new clients and warn each other about police raids.

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