Reserve Bank of Zimbabwe Introduces Gold-Backed Currency “ZiG” to Combat Economic Instability

Reserve Bank of Zimbabwe Introduces Gold-Backed Currency “ZiG” to Combat Economic Instability

The Introduction provides an overview of the Reserve Bank of Zimbabwe’s (RBZ) initiative to address economic instability by introducing a new gold-backed currency, the ZiG.

Background:

The Background section discusses Zimbabwe’s economic challenges, including hyperinflation and currency instability, leading to the collapse of the Zimbabwean dollar in 2009.

Launch of ZiG:

This section highlights the launch of the ZiG on April 5, 2024, as a replacement for the Zimbabwean dollar and its aim to restore stability and confidence in the financial system.

Features of ZiG:

Here, the key features of the ZiG are outlined, including its backing by gold reserves, denominations, and its circulation alongside other foreign currencies.

Significance of ZiG:

The Significance section elaborates on how the introduction of ZiG signifies Zimbabwe’s attempt to move past economic challenges towards a more stable monetary future.

Future Outlook:

Lastly, the Future Outlook section discusses the potential effectiveness of ZiG in mitigating economic instability and fostering long-term economic growth, contingent upon robust economic policies and political stability.

Multiple Choice Questions (MCQs) with Answers:

  1. What is the name of the new gold-backed currency introduced by the Reserve Bank of Zimbabwe?
    • A) ZD (Zimbabwe Dollar)
    • B) ZiG (Zimbabwe Gold)
    • C) USD (United States Dollar)
    • D) ZWN (Zimbabwean Dollar)
    • Answer: B) ZiG (Zimbabwe Gold)
  2. When was the ZiG officially launched?
    • A) April 5, 2022
    • B) April 5, 2023
    • C) April 5, 2024
    • D) April 5, 2025
    • Answer: C) April 5, 2024
  3. What caused the collapse of the Zimbabwean dollar in 2009?
    • A) Deflation
    • B) Stable exchange rates
    • C) Hyperinflation
    • D) Gold standard
    • Answer: C) Hyperinflation
  4. What backs the value of the ZiG?
    • A) Foreign currency reserves
    • B) Oil reserves
    • C) Gold reserves
    • D) Agricultural products
    • Answer: C) Gold reserves
  5. What is one of the aims of introducing the ZiG?
    • A) Increase exchange rate volatility
    • B) Restore public trust in the financial system
    • C) Encourage hyperinflation
    • D) Promote currency devaluation
    • Answer: B) Restore public trust in the financial system