The Zimbabwe Gold (ZiG; code: ZWG)[3] is the official currency of Zimbabwe since 8 April 2024,[2] backed by US$575 million worth of hard assets: foreign currencies, gold, and other precious metals.[4][5][6] It replaced the Zimbabwean dollar, which suffered from rapid depreciation, with the official exchange rate surpassing 30,000 Zimbabwean dollars per U.S. dollar on 5 April 2024, whilst the parallel market rate reached 40,000 per U.S. dollar.[7] Annual inflation in Zimbabwe hit 55.3% in March 2024.[8]
ZiG | |
|---|---|
 New coins | |
| ISO 4217 | |
| Code | ZWG (numeric: 924) |
| Subunit | 0.01 |
| Unit | |
| Plural | ZiG |
| Symbol | ZiG |
| Denominations | |
| Subunit | |
| 1⁄100 | cent notionally only; cents are not used in any denomination |
| Banknotes | ZiG10, ZiG20, ZiG50, ZiG100, ZiG200 |
| Coins | ZiG1⁄10, ZiG1⁄4, ZiG1⁄2, ZiG1, ZiG2, ZiG5[1] |
| Demographics | |
| Date of introduction | 8 April 2024[2] |
| Replaced | Zimbabwean dollar |
| User(s) |  Zimbabwe |
| Issuance | |
| Central bank | Reserve Bank of Zimbabwe |
| Website | www |
Although not used in a denomination, it is notionally divided into 100 cents, which were first used by the Zimbabwe Stock Exchange before the currency had an ISO code. Cents were officially recognized by the Reserve Bank of Zimbabwe when a currency code for the Zimbabwe Gold was introduced in June 2024.[9]
Background
editThe ZiG currency was announced on 5 April 2024, taking the name from ZiG digital tokens, which are now available as GBDT.[10] The ZiG is Zimbabwe's sixth attempt since 2008 at creating a new currency that will make it independent of the US dollar.[11]
Since the currency crisis of 2008–2009, Zimbabwe has a multi-currency system. It was introduced in 2009 after the hyperinflation of the fourth Zimbabwean dollar (ZWL). For ten years there was no Zimbabwean currency. However in February 2019 the government introduced the Zimdollar (ZWL) on par with the US dollar, but it was quickly devalued to $2.50 Zimdollars per US-dollar.[12] Briefly, from June 2019 to March 2020, the government required all transactions to be done in Zimdollars; but that quickly proved impractical.[13] Legal use of foreign currencies was restored and they remain legal tender.[14]
By April 2024, the value of the Zimdollar (the RTGS Dollar) had decreased by 99.9% to over one US-dollar equaling $30,000 Zimdollars officially, and even more on the black market.[7] At that time, U.S. dollars accounted for four-fifths of all transactions.[15]
History
editIn discussions the government decided to issue a new currency backed by gold reserves, the ZiG.[16]
Originally established at $2.50 ZiG to one USD, the ZiG began trading on April 8 at an exchange rate of 13.56 ZiG to one USD.[17] Since its launch, the proportion of transactions conducted in USD has declined from 85% to 70%.[15] The government and the central bank expect the use of ZiG to increase in the country gradually. As an incentive, companies are required to pay fifty-percent of their quarterly taxes in ZiG.[18][19] However, market forces have caused even the government to fail to switch to the new currency. Gift Mugano, a visiting professor of economics at the University of Zimbabwe Business School, said, "The government is [still] refusing its own money to pay for passports, fuel and other services."[20]
By October, 2024, after the first six months of trading, the ZiG had officially lost half its value (27 ZiG to 1 USD), but suffered a seventy-five percent loss on the unregulated market (50 ZiG to 1 USD).[21] In response, in late September the Monetary Policy Committee (MPC) of the Reserve Bank of Zimbabwe tightened monetary policies with the effect of halting further depreciation, at least so far.[22][23]
Features
editThe Reserve Bank of Zimbabwe, over the weekend of 6 April to 7 April 2024, released the currency features.[citation needed]
Denominations
editBanknotes
editBanknotes of Zimbabwe Gold were announced in eight denominations: 1, 2, 5, 10, 20, 50, 100, and 200 ZiG; however, a later announcement stated that the 1, 2, and 5 ZiG denominations would instead be issued in coin form. They began circulating on 30 April 2024.[24][5]
The ZiG notes are made from cotton paper, have the Zimbabwe Bird as their watermark, and are all equal in size, measuring 155 mm × 65 mm (6.1 in × 2.6 in).
According to a NewsDay article dated 31 May 2024, Governor John Mushayavanhu said that the Reserve Bank of Zimbabwe will not introduce 50- or 200-zig notes anytime soon as it fears that the bigger notes will fuel inflation. The notes have been printed and delivered. "We have introduced most of the cash denominations that we said we were going to. We have got ZiG1, ZiG2, ZiG5, ZiG10 and ZiG20 in circulation now," said Mushayavanhu. Only the 10- and 20-ZiG denominations have been confirmed to be issued as notes; the lower denominations are presumed to be coins. There was no word on the fate of the 100 ZiG note.[1]
| Value | Dimensions | Main colour | Obverse | Reverse | Watermark | Date of | Ref. | ||
|---|---|---|---|---|---|---|---|---|---|
| printing | issue | ||||||||
| 1 ZiG | 155 × 65 mm | Blue | Balancing rocks of Zimbabwe with trees | Liquid gold being moulded on top of a stack of 12 gold bars | Zimbabwe Bird and "RBZ" | 2024 | not issued | [25] | |
| 2 ZiG | 155 × 65 mm | Green | |||||||
| 5 ZiG | 155 × 65 mm | Pink | |||||||
| 10 ZiG | 155 × 65 mm | Navy blue | 30 April 2024 | ||||||
| 20 ZiG | 155 × 65 mm | Peach and green | 13 May 2024 | ||||||
| 50 ZiG | 155 × 65 mm | Brown | TBA | ||||||
| 100 ZiG | 155 × 65 mm | Olive green | TBA | ||||||
| 200 ZiG | 155 × 65 mm | Red | TBA | ||||||
| For table standards, see the banknote specification table. | |||||||||
Coins
editThe coins came in several forms: 1 ZiG, 2 ZiG, 5 ZiG. They were introduced on 30 April 2024, along with the banknotes.[26][27]
There are plans to introduce also coins for 1⁄10 ZiG, 1⁄4 ZiG, and 1⁄2 ZiG as well.
Banknotes of the same denominations will not be released.
Conversions
editExchange rates
editThe Zimbabwean dollar (ZWL) lost about 32% value on interbank in two-day trading, moving from 22,950 to 33,903 per U.S. dollar. The conversion to ZiG was based on gold price and swap rate.[28][29] On a press release dated 6 April 2024, the Reserve Bank of Zimbabwe announced that ZWL would be converted to ZiG at an exchange rate of 2498.7242 ZWL for one ZiG.[30][31] Zimbabweans were given 21 days to convert their cash into ZiG.[32]
The ZiG started trading on 8 April 2024 with an exchange rate of 13.56 ZiG per US dollar and was subsequently allowed to freely float.[33]
As a result of inflation, on 27 September 2024, the RBZ devalued the ZiG by 42.55% against the US dollar.[34] In the month of September, 2024, consumer prices rose by 37.2% in ZiG terms, compared to just 0.7% in USD terms during the same period. This was compared to a 5.8% rise in ZiG prices over the course of the month before (August).[35]
Zimswitch and banks
editAll banks and financial institutions were instructed to convert all ZWL balances, obligations, and accounts to the new currency, ZiG.[2]
See also
editReferences
edit- ^ "Zimbabwe introduces new 'ZiG' currency - CAJ News Africa". 6 April 2024.
- ^ a b c "Zimbabwe Replaces Battered Dollar With New Gold-Backed Currency Called ZiG". Bloomberg.com. 2024-04-05. Retrieved 2024-04-05.
- ^ "ISO 4217 Amendment Number 177" (PDF). SIX Interbank Clearing. Zurich: SIX Group. 20 June 2024. Archived from the original (PDF) on 20 June 2024. Retrieved 20 June 2024.
- ^ Chikandiwa, Tafadzwa Mhlanga and Harriet. "US$575m war chest to anchor new currency". The Zimbabwe Independent. Retrieved 2024-04-05.
- ^ a b "Zimbabwe Launches New Gold-backed Currency". AFP. 5 April 2024 – via Barrons.
- ^ Agbetiloye, Adekunle (2024-04-05). "Zimbabwe's new gold-backed currency ZiG to replace its dollar in April". Business Insider Africa. Retrieved 2024-04-05.
- ^ a b "Zimbabwe introduces new gold-backed currency to tackle inflation". Al Jazeera. 5 April 2024. Archived from the original on 8 April 2024.
- ^ Mutsaka, Farai (5 April 2024). "Zimbabwe introduces new currency as depreciation and rising inflation stoke economic turmoil". The Associated Press. Archived from the original on 7 April 2024. Retrieved 8 April 2024.
- ^ Mandivengerei, Paidashe (2024-06-26). "RBZ changes ZiG currency code to ZWG as International Standards Organisation approves certification". NewZimbabwe.com. Retrieved 2024-10-29.
- ^ "Zimbabwe gets new currency: ZiG, to restore stability". The Chronicle. 6 April 2024. Archived from the original on 8 April 2024. Retrieved 6 April 2024.
- ^ Huileng, Tan (9 April 2024). "Zimbabwe just introduced a new gold-backed currency in an attempt to fight inflation and wean off the US dollar". Business Insider. Archived from the original on 12 April 2024. Retrieved 12 April 2024.
- ^ Winning, Alexander (25 February 2019). "Analysis: Zimbabwe struggles to convince doubters as it launches new currency". London: Thomson Reuters. Reuters. Archived from the original on 2 May 2019.
- ^ Matiashe, Faral (15 April 2020). "Zimbabwe is on lockdown, but money-changers are still busy". Al Jazeera. Archived from the original on 16 April 2020.
- ^ "Zimbabwe extends multi-currency system to 2030". Reuters. 27 October 2023. Archived from the original on 11 November 2023. Retrieved 24 March 2024.
"Settlement of any transaction or payment for goods and services in foreign currency, shall ... be valid until the 31st December, 2030," reads the gazette.
- ^ a b Bull, Alister; Ndlovu, Ray (8 August 2024). "All About ZiG, Zimbabwe's Latest Shot at a Stable Currency". Bloomberg News. Retrieved 9 August 2024.
- ^ Chingono, Nyasha (5 April 2024). "Zimbabwe launches gold-backed currency to replace battered local dollar". Reuters. Archived from the original on 5 April 2024. Retrieved 5 April 2024.
The new currency - called Zimbabwe Gold (ZiG) - will circulate alongside foreign currencies, central bank governor John Mushayavanhu told a press conference in the capital Harare.
- ^ Chingono, Nyasha; Savage, Rachel (8 April 2024). "Zimbabwe's new ZiG currency starts trading, credibility doubts linger". Reuters.
- ^ "Why ZiG cannot immediately replace USD transactions". The Zimbabwe Mail. 12 April 2024. Archived from the original on 12 April 2024. Retrieved 12 April 2024.
- ^ Ndlovu, Ray (12 April 2024). "Zimbabwe's Central Bank Chief Sees Deflation Risk From Strong ZiG". BNN Bloomberg. Archived from the original on 12 April 2024. Retrieved 12 April 2024.
- ^ Muronzi, Chris (7 May 2024). "Zimbabwe's illegal forex dealers use WhatsApp to find clients, evade police". Al Jazeera.
- ^ "Zimbabwe's gold-backed currency loses half its value: Why and what's next?". Al Jazeera. 24 October 2024. Archived from the original on 15 November 2024.
- ^ "Zimbabwe's Tight Monetary Policy Stance Boosts ZiG, MPC Member says". Bloomberg. 4 November 2024.
- ^ "Zimbabwe's Gold-Backed Currency Strengthens Amid Central Bank's Tightened Monetary Policy". The Zimbabwe Mail. 4 November 2024. Archived from the original on 15 November 2024.
- ^ "ZiG Begins Trading as Zimbabwe Banks Struggle With the Switch". Bloomberg.com. 2024-04-08. Retrieved 2024-04-08.
- ^ "ZiG Posters" (PDF). Reserve Bank of Zimbabwe. Harare. 6 April 2024. Archived from the original (PDF) on 8 April 2024. Retrieved 8 April 2024.
- ^ "RBZ to introduce ZiG 1 to 5 in coins – DailyNews". dailynews.co.zw. Retrieved 2024-04-27.
- ^ Matambanadzo, Chris (2024-04-26). "ZiG Currency Revamp: RBZ Governor Announces Major Changes to Banknotes and Coins, Unveils New Denominations". iHarare News. Retrieved 2024-04-27.
- ^ "Zimbabwe new currency". Chronicles. Retrieved 2024-04-06.
- ^ "Zimbabwean dollar balances shrink in value amid ZiG currency launch". www.thezimbabwean.co. Retrieved 2024-04-06.
- ^ "Press Statement" (PDF). Reserve Bank of Zimbabwe. 6 April 2024. Archived from the original (PDF) on 9 April 2024. Retrieved 9 April 2024.
- ^ "RBZ satisfied with currency switch progress". The Herald. 8 April 2024. Archived from the original on 8 April 2024. Retrieved 8 April 2024.
- ^ Taruvinga, Mary (5 April 2024). "Zimbabwe Launches New Gold-backed Currency". Barron's. Archived from the original on 5 April 2024. Retrieved 8 April 2024.
- ^ Ndlovu, Ray (8 April 2024). "ZiG Debuts in Zimbabwe's Sixth Effort at a Revamped Currency". Bloomberg. Archived from the original on 9 April 2024. Retrieved 9 April 2024 – via Yahoo! Finance.
- ^ "Zimbabwe currency: Bank knocks 40% off value of gold-backed Zig". www.bbc.com. Retrieved 2024-10-08.
- ^ Zimbabwe, New (2024-10-26). "Statistics agency notes soaring ZWG inflation rate, now pegged at 37.2%". NewZimbabwe.com. Retrieved 2024-10-29.
External links
edit| Preceded by: Zimbabwean dollar Reason: inflation Ratio: 2498.7242 ZWL = 1 ZiG |
Currency of Zimbabwe 8 April 2024 – Note: Part of a multi-currency system |
Succeeded by: Current |
