Zimbabwe’s central bank launched a new “structured currency” backed by gold on Friday, as it seeks to tackle 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.

The ZiG would be “fully anchored and fully backed” by a basket of reserves comprising foreign currency and precious metals – mainly gold, he added.

The move aimed at fostering “simplicity, certainty, (and) predictability” in Zimbabwe’s financial affairs, he added, presenting the new banknotes that will come in seven denominations ranging from 1 to 200 ZiG.