Zimbabwe’s ZiG weakens to lowest level since launch

Zimbabwe’s gold-backed ZiG currency has weakened to its lowest level against the US dollar since it was launched a month ago.

The currency is trading at 13.67 to the dollar, according to data posted Monday on the Reserve Bank of Zimbabwe’s website, a decline of 0.8 percent from its first day of trading at 13.56 per dollar on April 8.

The ZiG, short for Zimbabwe Gold, is the southern African nation’s sixth attempt to deliver a functioning local currency since 2008. It is backed by 2.5 tons of gold and US$100 million in foreign currency reserves held by the central bank.

Authorities want to seek full convertibility of the unit at some stage to further boost its appeal, Finance Minister Mthuli Ncube said in a May 2 interview.

The first steps of achieving convertibility may include engaging with Zimbabwe’s largest trading partners to accept payment in the new currency, said central bank Deputy Governor Innocent Matshe. South Africa is Zimbabwe’s largest trading partner and accounted for almost 35 percent of exports in March, according to data from the national statistics agency.

Mozambique and Zambia, which also border Zimbabwe, are other key trading partners-ebusinessweekly