Zimbabwe News

RBZ says all Zimdollar balances to be converted to ZiG

The Government of Zimbabwe has replaced the Zimbabwe dollar with a new unit called the ZiG backed by a basket of foreign currency and gold.

Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu told a press conference in Harare on Friday, 05 April, that the ZiG, short for Zimbabwe Gold, would be launched on April 8 at an introductory level of 13.56 per dollar and a new interest rate set at 20%.

In his maiden monetary policy statement Mushayavanhu said all Zimdollar prices in the shops must now be converted to the new ZiG.

Mobile operators, such as money transfer services, have until Monday to shift their platforms to the new ZiG. All Zimdollar balances will now be converted to this new currency. Said Mushayavanhu:

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. The swap rate will be guided by the closing interbank exchange rate and the price of gold as at 5 April 2024.

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.

On conversion of all current ZW$ balances, banks are directed to rename all the current ZW$ accounts as ZiG accounts.

Gold-backed Digital Token (GBDT) accounts will no longer be called ZiG accounts but will be known as GBDT accounts.

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.

In instances where the cash holding to be exchanged is above ZW$100,000, banks shall apply the requisite know your customer (KYC) and Customer Due Diligence (CDD) principles.

Mushayavanhu also said the central bank will only print money that is fully backed by forex reserves or assets, and that he will make sure that the currency is fully convertible into the reserve currency on demand. He said:

The introduction of the new structured currency will naturally require the issuance of new banknotes to facilitate transactions in the economy, whilst maintaining the Bank’s policy of a cash-lite economy.

These notes shall be issued gradually in the market to cater for small transactions and to ensure the availability of change, thus, mitigating the use of retail vouchers in the local economy. As such, the proposed denominations will bring convenience to the transacting public.

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$.

The USD remains legal tender, and the multicurrency system will stay until at least 2030.

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