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. The Reserve Bank of Zimbabwe (RBZ) made the decision to slash the local exchange rate to 24 Zig to $1 (£0.75) on Friday.

Zimbabwe's gold-backed ZiG currency fell more than 40% against the U.S. dollar on the interbank market from Thursday to Friday, the central bank's website showed. The Reserve Bank of Zimbabwe's website gave the mid rate for ZiG as 24.

As Zimbabwe’s ZiG currency struggles to gain public trust, illegal money changers thrive, driving inflation and highlighting deep-rooted economic issues.

Zimbabwe's central bank allowed the local gold-backed currency to fall over 40% against the dollar on Friday and hiked its policy rate, giving in to weeks of sustained pressure on the currency which was only launched in April.