ZiG currency to replace Zimbabwe dollar

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RBZ unveils new gold-backed ZiG currency to replace Zimbabwe dollar

Zimbabwe will introduce a new "structured currency" linked to foreign currencies and gold that it expects to provide more stability than its weakening dollar and help rein in inflation, new central bank governor John Mushayavanhu said on Friday.

As the Zimbabwean dollar tumbled this year from under 6,000 to above 33,000 to the U.S. dollar, annual inflation soared beyond 55 percent in March, evoking bitter memories of hyperinflation over a decade ago.

The new currency – called Zimbabwe Gold (ZiG) – will be backed by foreign currencies, gold and precious minerals, Mushayavanhu told a press conference in Harare, adding that it would circulate alongside a basket of other currencies.

He said the central bank would also introduce a market-determined exchange rate.

"If we implement these measures, we expect them to have an impact on inflation," Mushayavanhu said.

The central bank also set its main interest rate at 20 percent, which it said was a re-calibrated rate, a drastic cut from the previous rate of 130 percent.

The central bank would strictly adhere to statutory limits on bank lending to the government, he said, partly blaming "quasi-fiscal activities" for past instability, adding that these would be "discontinued."

Starting next Monday, Mushayavanhu said Zimbabweans can swap their old Zimbabwe dollar bank notes for ZiG notes for the next 21 days. Banks were directed to convert current Zimbabwe dollar balances to the ZiG.

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

The ZiG opened with an exchange rate of US$1 : 13.5616 ZiG. Based on the interbank rate of US$1 : ZWL33,903 on Friday, 1 ZiG was worth ZWL2499.

The ZiG notes and coins will be issued in denominations made up of 1ZiG, 2ZiG, 5ZiG, 10ZiG, 20Zig, 50ZiG, 100ZiG, and 200ZiG. Coins of half ZiG and quarter ZiG are also currently being minted.

Mushayavanhu said as of Friday, the RBZ's reserve asset holdings comprise of US$100 million in cash and 2.522 tonnes of gold worth US$185 million to back the entire local currency component of reserve money which currently stands at ZW$2.6 trillion requiring full cover of gold and cash reserves amounting to US$90 million. The total amount of gold and cash reserve holdings of US$285 million represents more than three times cover for the ZiG currency being issued, he said.

[stef]

Coins will be 1, 2 and 5 ZiG. Design (from gazette):

3. The design of the ZiG coins shall be
(a) on the observe side of all the ZiG coins, an impression of the Zimbabwe Bird looking to the left, and around shall be the inscription "ZIMBABWE" with the year of manufacture;
(b) on the reverse side
(i) in the case of the one ZiG coin, an impression of the Flame Lily and the inscription "1ZiG" to the bottom right of the impression of the Flame Lily;
(ii) in the case of the two ZiG coin, an impression of the Great Zimbabwe Monument and the inscription "2ZiG" to the top right of the impression of the Great Zimbabwe Monument;
(iii) in the case of the fi ve ZiG coin an impression of the Victoria Falls and the inscription "5ZiG" to the top right of the impression of the Victoria Falls;

[stef]

Diameter (mm): 20 / 20.09 (error?) / 24.09

Weight (g): 3.75 / 5.30 / 7.50

Nickel plated steel.

[eurocoin]

There has indeed been decided that the 1, 2 and 5 Zig banknotes, the designs of which had already been unveiled, will instead be coins. The governor of the Reserve Bank of Zimbabwe also mentioned during a meeting with the media on April 25, that there will also be 1/4 Zig, 1/2 Zig and 1/10 Zig coins.

[Pabitra]

Diameter (mm): 20 / 20.09 (error?) / 24.09

Weight (g): 3.75 / 5.30 / 7.50

Nickel plated steel.

1 ZiG - plain edge
2 ZiG - fully serrated edge
5 ZiG - interrupted milling edge

Also from the same gazette

[eurocoin]

Photos of the 1, 2  and 5 ZiG coins have appeared online.

[eurocoin]

[eurocoin]