Reserve Bank to Introduce Higher Denomination ZiG Notes

January 14, 2025
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HARARE- The Reserve Bank of Zimbabwe (RBZ) is set to introduce higher denomination ZiG notes in an effort to facilitate smoother cash transactions across the country. RBZ Governor John Mushayavanhu confirmed that the new notes will be gradually introduced into the market to align with expected economic activity and ensure stability within the financial system.

Mushayavanhu explained that the amount of new currency to be issued will be carefully calibrated to meet projected economic demands. “We are aiming for a consistent increase in the proportion of cash to total deposits, targeting around 5 percent, which is similar to other countries with comparable economic structures in the region,” he said.

The central bank remains committed to preserving the value of the ZiG currency, supporting its role as a transactional medium and store of value, while also continuing the process of de-dollarisation. As part of this strategy, the RBZ plans to gradually increase the amount of ZiG in circulation to levels that match broader economic growth.

A key point highlighted by the RBZ is that any increase in the local currency supply will be fully supported by foreign reserves, including gold, other precious metals, and nostro balances, ensuring alignment with the bank’s foreign reserves accumulation goals.

Despite the RBZ’s efforts to stabilize the ZiG, the official exchange rate stood at approximately ZiG26 to US$1 on January 13, 2025, while the street rate remained significantly higher at around ZiG40 to US$1. Retailers have also increasingly abandoned the fixed official rate, adjusting prices in USD to mitigate potential losses from exchange rate fluctuations.

The introduction of higher denomination notes is expected to help ease cash transactions, but it remains to be seen how effectively it will address the ongoing challenges in Zimbabwe’s currency market.