The economic news in Zimbabwe is marked by the introduction of new banknotes and coins. The highest denomination note in the new currency, known as Zimbabwe Gold or ZiG, will be the 200 ZiG denomination, worth around US$15. In line with government guidelines, individuals will be allowed to withdraw up to ZiG 3,000 per week, while businesses will be able to withdraw up to ZiG 30,000.
Introduced electronically at the beginning of April 2024, Zimbabwe Gold or ZiG has been officially in circulation since 30 April. This new currency replaces the Zimbabwean dollar, whose value collapsed in 2023, leading to galloping inflation. Following the short lead times granted to the banks for the transition to the ZiG, a withdrawal limit has been set at ZiG 3,000 for individuals and ZiG 30,000 for businesses. Different limits have been set for different entities: schools, hospitals, clinics and local authorities will have a monthly limit of ZiG 250,000, while ministries and government departments will have a limit of ZiG 300,000. It should be noted that there is no limit on cash withdrawals by Parliament, the courts and international organisations.
“We are doing what we are doing to ensure that our local currency doesn’t die. We are already in a situation where almost 85% of our transactions are done in the US because our currency has lived enough to store value.”
John Mushayavhanu, Governor of the Reserve Bank of Zimbabwe – Zimbabwe
It should be noted that the highest denomination of the new locally produced currency, backed mainly by gold, will be the 200 ZiG note, worth around $15. According to the authorities, the aim of introducing the ZiG is to remedy the hyperinflationary environment that Zimbabweans have been enduring since 2000, a solution about which the country’s citizens have many reservations.
“My expectation is that the currency will bring stability but I want it to be accepted for all transactions, not just for small items like transport fees or groceries, so we still use the US dollar for big purchases.”
Leon Makombe, Security officer – Zimbabwe
Despite the optimism of the authorities, according to initial indications from economists, a digital version of the ZiG has already depreciated by 25% against the US dollar on the black market. Historically, there have been major policies regarding currencies as legal tender in Zimbabwe, including the adoption of the US dollar in 2009 after hyperinflation decimated the value of the local currency.
