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Zimbabwe introduces new structured currency ZiG, old ZWL notes to be phased out in next 21 days |

By Staff Reporter

Reserve Bank of Zimbabwe (RBZ) incoming governor John Mushayavanhu has introduced a new gold-backed currency, the Zimbabwe Gold (ZiG).

The ZiG is in 1, 2, 5, 10, 20, 100 and 200 denominations, a ZiG half and a quarter. The starting exchange rate to be gazetted next Monday of the ZiG currency will be at a rate of US$1: 13.56.

Presenting the Monetary Policy Statement this Friday, Mushayavanhu said Zimbabweans have 21 days to convert the ZWL notes to ZiG.

All banks have been directed to convert their systems to the ZiG currency.

He added that the multi-currency system will remain and price shifts will be determined by the movement in gold prices.

“With effect from 5 April 2024, banks shall convert the current Zimbabwe dollar balances into the new currency which shall be called Zimbabwe Gold (ZiG) to foster simplicity, certainty, and predictability in monetary and financial affairs. The new currency will co-circulate with other foreign currencies in the economy,” he said.

The recently sworn in governor said the swap rate shall be used to make legitimate conversions of all ZW$ deposits in the banking sector; all ZW$ loans and advances made by the sector; ZW$ treasury bills; all outstanding auction allotments; all export surrender obligations; all prices of goods and services in ZW$; and any other ZW$ denominated obligations.

“The starting exchange rate to be gazetted next Monday of the ZiG currency will be at a rate of US$1: 13,56and price shifts will be determined by the movements in gold prices,” Mushayavanhu said.

All ZW$ notes and coins held by account holders will be credited into their ZiG accounts using the applicable conversion factor.

The banks will continue to accept these deposits for a period of 21 days after 5 April 2024.

The Reserve Bank has made special arrangements for those without bank accounts to swap their ZW$ notes and coins at POSB and AFC Commercial Bank within 21 days after 5 April 2024.

“Accordingly, ZiG notes and coins shall be issued in denominations made up of 1ZiG, 2ZiG, 5ZiG, 10ZiG, 20Zig, 50ZiG, 100ZiG, and 200ZiG which will be distributed through the usual normal banking channels and will be fully covered by the quantity and value of gold and foreign currency held as reserves.

“The currency denominations are also informed by the intervening exchange rate of the ZiG to the US$,” he said.

Mushayavanhu said ZiG shall at all times be anchored and fully backed by a composite basket of reserves comprising foreign currency and precious metals (mainly gold), received by the Reserve Bank as part of in-kind royalties and kept in the vaults of the Bank.

Foreign currency balances will be accumulated through market purchases from the 25% surrender requirements as well as sale of some precious metals received as royalties.

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