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A new gold-backed currency called ZiG has been introduced by Zimbabwe

Published on April 09, 2024
Current Context: Zimbabwe has indeed introduced a new gold-backed currency called ZiG, which stands for "Zimbabwe Gold" on 8th April 2024.

A new gold-backed currency called ZiG has been introduced by Zimbabwe
  • This is the latest attempt by the country to stabilize an economy that has faced numerous crises over the past 25 years.
  • The new banknotes come in denominations from 1 to 200.
  • The ZiG replaces the Zimbabwean dollar, the RTGS, which had lost three-quarters of its value so far this year.
  • However, the US dollar, which accounts for 85% of transactions, will remain legal tender.
  • The new currency was rolled out with immediate effect and banks must convert current Zimbabwe dollar balances to the ZiG.
  • The central bank has committed to ensuring that the amount of local currency in circulation is backed by an equivalent value in precious minerals - mainly gold - or foreign exchange.
  • It’s also worth noting that the ZiG is not a physical form of currency.
  • It is a digital token backed by gold.
  • The value of ZiG is linked to the price of gold, but it operates as a digital asset rather than a physical banknote or coin.

Question:

Q.1 What is the name of the new currency introduced by Zimbabwe?
a. Zimbabwean Dollar
b. ZiG
c. RTGS
d. US Dollar
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