Zimbabwe introduces new currency as depreciation and rising inflation stoke economic turmoil

(5 Apr 2024)
RESTRICTION SUMMARY:
ASSOCIATED PRESS
Harare, Zimbabwe - 05 April 2024
1. Wide Reserve Bank of Zimbabwe Governor John Mushayavanhu presenting new currency notes
2. SOUNDBITE (English) John Mushayavanhu, Governor of Reserve Bank of Zimbabwe:
"We are doing what we are doing to ensure that our local currency does not die. As I said, we were already in a situation where almost 85% of transactions are being conducted in US dollar. Because because our local currency was not giving, was not living up to the function or store value."
3. Wide Governor presenting note
4. SOUNDBITE (English) John Mushayavanhu, Governor of Reserve Bank of Zimbabwe:
"Stable currency will ensure that we don't see massive price swings when it day to day basis. Divisibility. I didn't mention we want a situation where you'll be able to go out and buy and get change and transactional capability. Once we stabilize our currency, it will be more accepted in the economy and we should see more and more people transacting, not on currency."
5. Wide Governor shaking hands with officials
6. Various of banknotes
6. Various exteriors of the Reserve Bank of Zimbabwe
STORYLINE:
Zimbabwe on Friday launched a new currency to replace its previous one that in recent months has been battered by depreciation, and in some instances rejection by the population. Authorities hope the new measure will halt a currency crisis underlining the country’s yearslong economic troubles.
Reserve Bank of Zimbabwe Gov. John Mushayavanhu said the new currency will be called ZiG, and will be anchored on gold reserves and a basket of foreign currencies. It goes into effect on Monday.
The Zimbabwe dollar has come under sustained pressure in recent weeks, making it one of the world’s worst performing currencies.
Since January, the Zimbabwe dollar lost over 70% of its value on the official market, and was plunging even further on the thriving but illegal black market.
Inflation increased from 26.5% in December last year to 34.8% this January before spiking to 55.3% in March, according to official figures.
Traders were increasingly rejecting lower denominations of the now scrapped currency, with many insisting on payment only in U.S. dollars, which are also legal tender in the southern African country.
“We are doing what we are doing to ensure that our local currency does not die. We were already in a situation where almost 85% of the transactions are being conducted in U.S dollars,” Mushayavanhu told reporters in the capital, Harare. People have three weeks to exchange the old notes with the new currency, he said.
Friday’s announcement is the latest of a cocktail of currency measures undertaken by the Zimbabwean government since the initial spectacular collapse of the Zimbabwe dollar in 2009.
The period saw the country at one point issuing a 100 trillion Zimbabwe dollar banknote before the government was forced to temporarily scrap its currency and allow the U.S. dollar to be used as legal tender.
The country re-introduced a domestic note in 2016, marking the beginning of another round of currency volatility highlighted by changes to currency policy that included the banning of foreign currencies such as the U.S dollar for domestic transactions in 2019.
This was followed by the unbanning of the greenback a while later after few ordinary people took heed to the U.S dollar ban and the black market thrived, while the local currency quickly depreciated.
AP video by Pindai Dube
===========================================================
Find out more about AP Archive: www.aparchive.com/HowWeWork
Twitter: / ap_archive
Facebook: / aparchives ​​
Instagram: / apnews
You can license this story through AP Archive: www.aparchive.com/metadata/you...