The Government of Zimbabwe today announced the adoption of a new currency, called ZiG, indexed to the price of gold, to replace the current Zimbabwean dollar, in an attempt to combat hyperinflation and stabilize the country's economy.

“From today, banks will convert balances currently denominated in Zimbabwe dollars into the new currency known as Zimbabwe Gold (ZiG).”

Central Bank Governor John Mushayavanhu announced at a press conference.

This measure aims to promote “simplicity, trust and predictability” in Zimbabwe's finances, Mushayavanhu added when presenting the new colored notes, which will be presented in eight denominations ranging from ZiG1 to ZiG200.

Zimbabweans have 21 days to exchange their old notes.

The southern African country, which borders Mozambique, has been plunged into a serious economic crisis for more than 20 years, marked by galloping inflation and shortages of food, fuel and medicine.

Zimbabwe's approximately 16 million inhabitants are affected by widespread poverty and a high unemployment rate.

Zimbabwe recorded one of the highest inflation rates in the world, reaching 55% in March, after reaching triple-digit levels last year, during a previous episode of hyperinflation that revived bad memories.

The local currency has lost almost 100% of its value against the US dollar in the last year. On Friday, the Zimbabwean dollar was trading at around 30.000 US dollars and 40.000 on the black market, according to Zim Price Check.

In 2008, inflation got out of control and prices were rising so quickly that labels on store shelves had to be changed several times a day.

In recent years, the Zimbabwean government has tried unsuccessfully to stabilize the economy, namely through the issuance of gold coins, which should curb the passion for the American dollar, accused of weakening the local currency.