"$100=Z$1,000,000": African Country With Worst Currency Globally Set to Back Money Using Gold
- Zimbabwe's finance minister said the country is looking to back its currency with gold
- This comes after the Zimbabwean dollar emerged as Africa's and the world's weakest currency against the US dollar
- The government has made numerous attempts to salvage it since it was reintroduced in 2019
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
Zimbabwe's finance minister, Mthuli Ncube, has announced that the country may back its currency with gold to end exchange-rate instability.
Source: UGC
He said this in an online press briefing held on Monday, February 12, to announce a conference of African ministers that Zimbabwe will host at the end of this month.
Last week, Zimbabwean President Emmerson Mnangagwa hinted that the country's leaders are thinking about revamping the worst-performing currency in the world.
Legit.ng earlier reported that the Zimbabwean dollar has emerged as Africa's and the world's weakest currency against the US dollar.
The currency weakened on Tuesday, January 30, 2023, trading above 10,000 against the US dollar in the spot market.
The decline was the worst since the currency was reintroduced in 2019.
The depreciation means anyone in Zimbabwe with $100 automatically becomes a millionaire in local currency.
Structured currency being developed
According to the finance minister, monetary and treasury officials are developing a structured currency.
Bloomberg reported that since the Zimbabwe dollar was reintroduced in 2019 after being abandoned ten years earlier due to hyperinflation that destroyed its value, the government has made numerous attempts to salvage it.
There have been attempts to stop the decline, such as introducing gold coins and ZiG digital tokens backed by metal.
The unusual methods that officials favoured to stop the local unit's collapse have already drawn criticism from the International Monetary Fund.
Ncube stated that the president aimed to give policy forward guidance to the market on currency and monetary policy adjustments that are being examined. According to him, the country in southern Africa is also considering the viability of creating a currency board.
Ncube said:
“This will provide a lasting solution to the volatility of the exchange rate."
According to Lloyd Mlotshwa, head of research at IH Securities, a brokerage company with headquarters in the capital, Harare, a currency board could help control the sometimes unstable exchange rate when implemented correctly.
As recently as two years ago, Zimbabwean authorities discussed forming a board but decided against it.
The Zimbabwean dollar has performed the worst in the world throughout this time, falling about 50% versus the US dollar this year after falling 90% in 2023.
According to the central bank's website statistics, it traded at Z$11,617 per US dollar on Monday, February 13.
Naira among list of 15 worst-performing currencies
Legit.ng earlier reported that the Nigerian currency was ranked among the worst-performing currencies in the world following a massive depreciation in the official and black markets.
The data compiled by StaitSense, a data-driven company, showed that the naira depreciated by 139.55% against the US dollar from January to Monday, February 5, 2023.
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Source: Legit.ng
