In the latest effort to devise a credible national currency, Zimbabwe replaced its dollar with the ZWG, short for Zimbabwe Gold. The new unit is backed by bullion and foreign currency reserves held at the central bank. All told, it’s the country’s sixth attempt at establishing its own currency since 2008, when inflation crossed 500 billion percent, according to International Monetary Fund estimates. Not only did that render it worthless, it turned the unit into a global punchline: US Treasury secretaries would sometimes carry the notes around in their wallets as a reminder of the evils of hyper-inflation.
Brought back to life in 2019 after a decade-long furlough when the country ran solely on foreign currency, the Zimbabwean dollar lost ground against the US dollar every trading day this year. This had wiped around 80% off its value by the time newly appointed central bank Governor John Mushayavanhu put it out of its misery on April 5. The collapse had already forced four-fifths of the southern African nation’s economy to transact in US dollars for everything from food to medicine, with some businesses only accepting payment in greenbacks. Few people have forgotten the experience of 2008, when their savings were wiped out by inflation, so public trust in the local unit had always been low.
