Pixie DustThe Reserve Bank of Zimbabwe (RBZ) announced the replacement of the Zimdollar with a new unit called ZiG, backed by a basket of foreign currency and gold. RBZ Governor John Mushayavanhu disclosed this during a press conference in Harare on Friday, April 5. ZiG will debut on April 8 at an initial rate of 13.56 per dollar and a 20% interest rate. Mushayavanhu declared that all Zimdollar balances in shops must now convert to ZiG. Mobile operators and money transfer services have until Monday to transition to ZiG platforms, and all Zimdollar balances will switch to the new currency. He stated:
“From April 5, 2024, banks will convert current Zimbabwe dollar balances into the new currency to ensure simplicity, certainty, and predictability in monetary and financial matters.”
The new currency will coexist with other foreign currencies, with the swap rate guided by the closing interbank exchange rate and the gold price as of April 5, 2024. Mushayavanhu outlined the applications of the swap rate, including conversions of ZW$ deposits, loans, treasury bills, export obligations, and prices of goods and services.
Banks must rename current ZW$ accounts as ZiG accounts, while Gold-backed Digital Token (GBDT) accounts will become GBDT accounts. All ZW$ notes and coins will convert to ZiG accounts, with banks accepting deposits for 21 days post-April 5, 2024. Special arrangements will aid those without bank accounts in swapping ZW$ notes and coins at POSB and AFC Commercial Bank within the specified period.
For cash holdings exceeding ZW$100,000, banks will enforce know your customer (KYC) and Customer Due Diligence (CDD) principles. Mushayavanhu emphasized that the RBZ will print money fully backed by forex reserves or assets, ensuring full convertibility into the reserve currency on demand. He added:
“The introduction of the new structured currency will entail gradual issuance of new banknotes to facilitate transactions, maintaining the Bank’s cash-lite policy. Notes and coins, in denominations of 1ZiG to 200ZiG, will be fully covered by gold and foreign currency reserves and distributed through normal banking channels.”
The USD remains legal tender, and the multicurrency system will persist until at least 2030.
