Banks halt ZWL transactions as Zim switches to new...

Banks halt ZWL transactions as Zim switches to new currency ZiG

Nyashadzashe Ndoro

Zimbabwe woke up to a new financial reality on Saturday as banks halted the Zimbabwe Dollar transactions following the Reserve Bank of Zimbabwe’s announcement of currency switch.

The country is replacing the ZWL with a new gold-backed currency, the ZiG.

This move comes after President Emmerson Mnangagwa inspected the country’s gold reserves on Thursday, hinting at a potential monetary policy shift. The RBZ governor, John Mushayavanhu, confirmed these suspicions during his Monetary Policy Statement on Friday afternoon.

“The new ZiG currency comes in denominations of 1, 2, 5, 10, 50, and 100, with coins for smaller transactions. Foreign currency auctions, a system used to manage exchange rates, have been discontinued. Businesses are instructed to immediately adjust their pricing systems to reflect the new currency.”

A 21-day grace period has been announced for citizens to exchange their ZWL notes for ZiG. Several banks, including EcoCash, Steward Bank, ZB Bank, One Money, and FBC, have already suspended ZWL transactions to facilitate the transition.

This has caused some frustration, as highlighted by former legislator Temba Mliswa, who criticised the lack of prior warning from financial institutions.

“Just arrived in the country and went to collect money from the bank and SURPRISE! I am told that systems are down. Are systems really down or they are changing to the new currency? Why not advise clients prior so that people are not taken by surprise?

“Why can’t we be honest as a country? I will not state the name of the bank but you may need to confirm with yours before making any plans. With such sudden changes how do people go about their business now?”Governor Mushayavanhu assured citizens that the ZiG will circulate alongside other approved foreign currencies. This multi-currency system aims to bring stability after years of economic struggles in Zimbabwe.

The RBZ has been accumulating gold reserves in recent years, demanding a portion of mining royalties be paid in the precious metal. This gold backing is seen as a way of instilling confidence in the new ZiG currency.