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In order to stabilize the local currency and curb rising inflation, on the 5th local time, the Central Bank of Zimbabwe announced the launch of a new gold-backed currency, Zimbabwe Gold, to replace the old currency for trading.
The governor of the Central Bank of Zimbabwe, John Musayawanhu, said that the "Zimbabwe Gold" will be officially launched on the 8th, with face values of 1, 2, 5, 10, 50 and 100 respectively. The exchange rate of the new currency was set at 13.56 Zimbabwean gold to the United States dollar. People will have 21 days to exchange their old currency for new currency.
The Zimbabwean dollar has fallen more than 70% against the US dollar so far this year. Due to the continued fluctuation of exchange rates, more than 80% of transactions across Zimbabwe are settled in US dollars. At the same time, inflation in the country has soared from 26.5% in December to 55.3% currently.
John Mushayawanhu, Governor of the Central Bank of Zimbabwe: We are doing what we need to do to make sure that Zimbabwe's local currency does not die. Almost 85% of the transactions in our market are now settled in US dollars because our local currency does not fulfill its function or value.
This is Zimbabwe's sixth new currency issue since 2008. Zimbabwe's central bank said it currently holds $100 million in cash and $185 million worth of gold reserves, which add up to support the new currency.
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Editor: Wang Yifan