Some Zimbabwean supermarkets, street vendors, transport operators and tuckshops are no longer accepting payment in the local currency, citing confusion that has followed its 43% devaluation on September 27.

New Zimbabwe wrote on September 30 that the businesses mainly in Harare, the capital, are fearful of running losses if they accept the weakening six-month-old Zimbabwe Gold (ZiG).

“We do not know the rate to use, so it has become difficult for us to continue using the ZiG. What if we accept it and it is further devalued while in my possession?” said a tuckshop operator in Dzivarasekwa Extension, Harare.

The central bank allowed the ZiG to decline from about 14 to the greenback to 24.3, noting sustained pressure on the currency it introduced in April. It had weakened to 24.88 on September 30 and further to 25 on the following day, data on the Reserve Bank of Zimbabwe showed. 

The tender, backed by gold and foreign currencies worth about $380mn, is far weaker on the informal market at between 30 to 40, according to a local currency tracker, Zimpricecheck.

David Coltart, mayor of Bulawayo, the second-largest city, suggested the currency might not be gold-backed.

“Has there ever been a more rapid and precipitous collapse of a currency than the ZIG?” the opposition Citizens Coalition for Change official said per New Zimbabwe.

“Has there ever been a more brazen misrepresentation regarding the backing of a currency – i.e that it was backed by gold? Has there ever been a more grossly inappropriate name for a currency – ‘Zimbabwe Gold’ – ZIG?”