Same Old Story as Zimbabwe Launches Yet Another Currency
Zimbabwe has introduced a new currency, the ZiG, as announced by the new Reserve Bank of Zimbabwe (RBZ) Governor, John Mushayavanhu, in his long-awaited 2024 Monetary Policy Statement.
The introduction of the ZiG, which stands for “Zimbabwe Gold,” marks a significant shift in the nation’s financial landscape.
The new currency comes in denominations of 1, 2, 5, 10, 50, 100, and 200 with coins for half and a quarter ZiG.
“With effect from today, banks shall convert the current Zimbabwe dollar balances to ZiG,” stated Governor Mushayavanhu.
Zimbabweans have been given a 21-day window to exchange their old ZWL notes for the new currency.
“I don’t believe in taking people’s money. The ZiG will circulate with other currencies in the basket,” he added.
The interbank rate of April 5, 2024, will be used to convert Zimbabwe dollar balances to ZiG.
Same Old Story as Zimbabwe Launches Yet Another Currency
Starting Monday, 8 April, citizens are encouraged to deposit their Zimbabwe dollar notes in banks, with those holding ZWL100,000 or more required to explain the source and reason for holding such huge amounts.
One of the most notable features of the ZiG is its backing by gold, a move aimed at providing a stable and secure foundation for the currency.
The conversion rate from the Zimdollar to the ZiG has been set at Z$1 = 13.5686 ZiG, calculated by dividing the current ZWL rate by the day’s gold price.
This gold-backed approach is expected to enhance the currency’s credibility and attractiveness to both local and international investors.
Despite the introduction of the ZiG, Governor Mushayavanhu reassured the public that the multicurrency system would remain in place.
“The US dollar remains legal tender. The ZiG will circulate alongside other currencies,” he stated, highlighting the continued flexibility and inclusivity of Zimbabwe’s monetary policy.
According to Statutory Instrument 60 of 2024, the legal framework for ZiG, released on Friday:
“The Reserve Bank shall only issue ZiG notes and coins against reserves assets actually held and managed by it, and the value of the ZiG issued and in circulation at any one time shall be anchored in and backed or covered by a composite basket of foreign currency reserves and precious metals received (mainly gold) and valuable minerals, held and maintained by the Reserve Bank in its vaults as part of the in-kind royalties.”
The introduction of the ZiG marks a hopeful new chapter in Zimbabwe’s economic story.
With its gold backing and strategic implementation, the ZiG currency aims to bring much-needed stability and confidence to the nation’s financial system, paving the way for sustainable economic growth and prosperity.
