HARARE: Zimbabwe’s central bank launched a new “structured currency” backed by gold on Friday, as it seeks to tackle sky-high inflation and stabilise the country’s long-floundering economy.

The ZiG — short for Zimbabwe Gold — will replace the Zimbabwean dollar which has tumbled in value over the past year, pushing inflation through the roof, Reserve Bank governor John Mushayavanhu said. “With effect from today... banks shall convert the current Zimbabwe dollar balances into the new currency,” he said, presenting a monetary policy statement.

He also announced a drastic cut in the bank’s main interest rate, from 130 percent to 20 percent. The ZiG will be “fully anchored and fully backed” by a basket of reserves comprising foreign currency and precious metals — mainly gold, Mushayavanhu added.