Zimbabwe’s president says he will take steps to stop the currency from falling

Zimbabwe’s President Emmerson Mnangagwa promised on Wednesday to take steps to protect people’s incomes after the country’s new gold-backed currency fell in value on the black market five months after it was launched.

The Zimbabwe Gold, or ZiG, lost almost 47% of its value on the black market last Friday, which made it worth 43% less.

Concerns have been raised about the return of speculative actions on the parallel market. In a speech to the parliament, Mnangagwa said, “Corrective measures are being put in place to protect Zimbabweans from disruptions.”

The ZiG has lost value again since it was devalued. It fell from 24.3902 to 25.2824 on Wednesday, and on the black market, it has reached 32 per U.S. dollar.

Mnangagwa said that the falling value of the ZiG will give people “greater flexibility” and make them more likely to trade on the official market if they have foreign currency.

“Government remains committed to backing the currency through setting aside 50% of royalties to build reserves,” he stated.

After a period of hyperinflation under former leader Robert Mugabe, the southern African country has tried six times in 15 years to find a safe currency. The ZiG is the sixth attempt.

The Bankers Association of Zimbabwe said on Wednesday that last week’s move would lead to higher prices and less trust after meeting with central bank officials.