Zimbabwe’s ruling party has approved a resolution to establish the bullion-backed ZiG currency as the nation’s only legal tender, gradually eliminating the use of US Dollars. 

The government has been directed to “expedite efforts to dedollarize the economy and promote the use of the ZiG as the country’s sole currency,” according to the resolution adopted at the Zimbabwe African National Union-Patriotic Front’s (Zanu-PF) annual conference over the weekend. 

However, no timeline has been specified for this transition. 

The ZiG, short for Zimbabwe Gold, marks Zimbabwe’s sixth attempt in 15 years to replace the US Dollar as its primary transaction currency, Bloomberg reports. 

Under current legislation, the US Dollar is set to remain legal tender until 2030, although President Emmerson Mnangagwa has hinted that this timeline might be accelerated. 

Launched in April, the ZiG has encountered challenges, including a 43% devaluation last month, sparking calls for its abandonment. However, since the September devaluation, “public confidence in the ZiG has weakened and incentivised further dollarization of the economy,” according to a recent note by Oxford Economics.

Furthermore, last week, the International Monetary Fund warned that the ZiG currency alone cannot resolve Zimbabwe's underlying economic challenges, such as high inflation and low public trust in fiscal and monetary authorities.

Zanu-PF, the ruling party in Zimbabwe since independence in 1980, frequently leverages its resolutions to shape government policy. In a recent resolution, it directed the government to implement “robust measures to strengthen the purchasing power of the ZiG and entrench its usage.” 

On Monday, the ZiG traded at an official rate of 28.37 per Dollar, while on the parallel market it was quoted between 40 and 50 per Dollar, as reported by ZimPriceCheck.com, a website that tracks exchange rates.