The International Monetary Fund (IMF) has voiced its support for Zimbabwe’s new Zimbabwe Gold (ZiG) currency, indicating it would like to see it “fully become a national currency.”

This endorsement is part of the considerations for potentially placing Zimbabwe under an IMF staff-monitored program.

The ZiG was introduced by the Reserve Bank of Zimbabwe in April as the country’s sixth attempt in 15 years to establish a stable local currency, aiming to combat extreme currency volatility and high inflation.

The ZiG is backed by 2.5 tons of gold and $100 million in foreign currency reserves held by the central bank.

Despite this backing, the ZiG has faced challenges in gaining public confidence, and government efforts to promote its use have largely been unsuccessful.

Wojciech Maliszewski, the IMF’s mission chief, emphasized that for the ZiG to achieve broader acceptance, measures to deepen the foreign exchange market and ensure full price discovery are necessary.

Ideally, the IMF seeks a single, unified exchange rate, aiming to eliminate the current gap between official and parallel market rates.

However, the ZiG’s 43% devaluation in September (intended to close this gap) and its limited convertibility have led many citizens to continue preferring foreign currencies.

Approximately 80% of transactions in Zimbabwe are still conducted in U.S. dollars, with some also in South African rand.

Despite this, Zimbabwean President Emmerson Mnangagwa has declared that the ZiG is intended to become the country’s sole legal tender by 2030, phasing out the current multicurrency system.