Zimbabwean ZiG

The Zimbabwe Gold (ZiG; code: ZWG) has been the official currency of Zimbabwe since 8 April 2024, backed by US$575 million worth of hard assets: foreign currencies, gold, and other precious metals. 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. Annual inflation in Zimbabwe hit 55.3% in March 2024.

Although fractional denominations exist, the ZiG has no formal subdivisions. Cents are used by the Zimbabwe Stock Exchange, each indicating $1/10$ of a ZiG.

Background
The ZiG currency was announced on 5 April 2024, taking the name from ZiG digital tokens, which are now available as GBDT. The ZiG is Zimbabwe's sixth attempt since 2008 at creating a new currency that will make it independent of the US dollar.

Zimbabwe has a multi-currency system, introduced in 2009 after the hyperinflation of the Zimbabwean dollar. In addition to the ZiG, foreign currencies are also legal tender. As of March 2024, 80% of all transactions in Zimbabwe were made in US dollars. The government and the central bank expect the use of ZiG to gradually increase in the country. Companies are required to pay 50% of their quarterly taxes in ZiG.

Features
The Reserve Bank of Zimbabwe over the weekend of 6 April to 7 April 2024 released the currency features.

Banknotes
Banknotes 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.

The ZiG notes are made from cotton paper, have the Zimbabwe Bird as their watermark and are all equal in size, measuring 155 x.

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.

Coins
The coins came in several forms: 1 ZiG, 2 ZiG, 5 ZiG. They were introduced on 30 April 2024, along with the banknotes.

There are plans to introduce also coins for $1/4$ ZiG, $1/2$ ZiG, and $1/undefined$ ZiG as well.

Banknotes of the same denominations will not be released.

Exchange rates
The Zimbabwean dollar (ZWL) lost about 32% value on interbank in a 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. 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. Zimbabweans were given 21 days to convert their cash into ZiG.

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.

Zimswitch and banks
All banks and financial institutions were instructed to convert all ZWL balances, obligations and accounts to the new currency, ZiG.