John Mushayavanhu dumps RTGS, introduces ZiG
Newly appointed Reserve Bank Governor John Mushayavanhu has introduced a new currency the Zimbabwe Gold, that will be known as ZiG. According to the governor, the ZiG is a structured currency that is backed by foreign currency reserves and gold.
What is a Structured Currency?:
The Governor said ‘’a structured currency is generally defined as a currency that is pegged to a specific exchange rate or currency basket and backed by a bundle of foreign exchange assets, potentially including gold. This means that the central bank can only issue domestic notes and coins when fully backed by foreign reserve currency or foreign exchange assets and that the currency is fully convertible in the reserve currency on demand, that is the definition of a structured currency.
‘’The structured currency we are introducing as Zimbabwe is going to be backed by a basket of comprising foreign exchange that we already hold in our nostro accounts and precious metals that we are collecting as royalties from precious minerals that are being mined in this country, and we are holding these as reserves at the central bank and those comprise mostly gold,’’ he said.
Introducing the ZiG currency
Mushayavanhu told journalists that the new ZiG currency will take effect from today 5 April 2024 and that it will co-circulate with the other currencies already in the economy.
‘’So with effect from today 5th April 2024, banks shall convert all Zimbabwe dollar balances into the new currency which shall be called the Zimbabwe Gold (ZiG).
‘’The new currency will co-circulate with other currencies in the country. I have been seeing stories on social media of people saying the Reserve Bank of Zimbabwe wants to convert our Nostro balances to ZiG. Nothing of that sort is going to happen. Certainly not under my watch, I don’t believe in taking people’s assets.
On the multi-currency regime, the new governor said ‘’The multi-currency regime is there to stay until 2030 as enunciated by the SI, and the ZiG currency is going to co-circulate with all the other currencies we have been using,’’ he said.
You have 21 to deposit your RTGS
To enable a smooth transition from the RTGS to the ZiG, Mushayavanhu has allowed only 21 days for people to bank their notes. He also made arrangements for those in marginalised areas.
‘’The banks will continue to accept deposits for 21 days after today. The reserve bank has made special arrangements for those in outlying areas who do not have bank accounts and we have made arrangements with POSB and AFC commercial banks they will take their cash to these banks and that cash will be converted to ZiG. However, KYC (know your customer) will apply if anyone is going to bring notes worth above 100,000 dollars. We need to know where you got it and why you have been keeping it, this is usual KYC requirements,’’ he said
Issuance of banknotes and coins
The governor said the ZiG coins and notes are going to be issued in denominations of 1 ZiG, 2 ZiG, 5 ZiG, 10 ZiG, 20 ZiG, 50 ZiG, 100 ZiG, and 200 ZiG. For divisibility, he said there is going to be half ZiG and a quarter ZiG to help with the problem of change.
John Mushayavanhu dumps RTGS, introduces ZiG
