Zimbabwe authorities use mixed tactics to stabilize new currency

The ZiG currency is valued differently on the official market compared to the black market. On the official market, $1 can be exchanged for about 13 ZiGs, but on the black market, $1 can be exchanged for up to 17 ZiGs. This difference has caused issues. The government in Zimbabwe is taking action against street currency dealers and businesses that are not following the official exchange rate. They have arrested dealers and frozen the accounts of businesses that are undermining the ZiG currency. The government believes that by using higher exchange rates than the official one, these dealers and businesses are devaluing the new currency. This crackdown is happening even though street currency dealers have been a common sight in Zimbabwe for a long time. Many shops and merchants prefer to use their own rates instead of the official one when accepting the local currency. Additionally, some businesses, like gas stations, are allowed to refuse the ZiG and only accept U.S. dollars. To enforce the official exchange rate, the government has announced fines for businesses that do not comply. They have also frozen bank accounts of businesses that reject the new currency or use higher exchange rates. The ZiG is the sixth currency used in Zimbabwe since the collapse of the Zimbabwe dollar in 2009 due to hyperinflation. Many citizens, including government workers, turn to the black market to trade their local currency for dollars. The government is working on ways to make it easier for individuals to access dollars for small transactions. However, economists and business groups warn that using force may not build confidence in the ZiG or stop black market trading. Street currency dealers have been a common sight in Zimbabwe for years, with many people relying on the black market to meet their needs, like paying rent in dollars.