The central bank says the exchange rate allows for greater flexibility.
Zimbabwe's central bank has devalued its gold-backed currency by over 40% against the US dollar, indicating that the last ditch effort to stabilise the country's volatile economy, is in trouble.
This slump is due to an increase in demand for the US dollar, which is also legal tender. It comes after warnings from by large retailers of store closures if the rate remained fixed at the previous level. According to the Reuters new agency, RBZ said in a statement that its Monetary Policy Committee made the move to allow greater exchange rate flexibility.
On paper the Zig had largely maintained it value since its launch, but on the black market, where most businesses secure the US dollars, it has more than halved in value.
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