The Zimbabwe Gold (ZiG; code: ZWG)[3] is the official currency of Zimbabwe since 8 April 2024,[2] backed by US$575 million worth of hard assets: foreign currencies, gold, and other precious metals.[4][5][6] 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.[7] Annual inflation in Zimbabwe hit 55.3% in March 2024.[8]
The ZiG is notionally divided into 100 cents, which were first used by the Zimbabwe Stock Exchange before the currency had an ISO code. Cents were officially recognized by the Reserve Bank of Zimbabwe when a currency code for the Zimbabwe Gold was introduced in June 2024.[9] However, the smallest coin is a 1 ZiG.[10]
Although the rate of devaluation of the ZiG may vary,[11] the ZiG has consistently lost value since its introduction, and its long-term prospects are dim so long as large grain imports continue and the government continues to overspend.[12][13] As of November 2024, Zimbabwe had US$21 billion in external debt.[14]
Background
The ZiG currency was announced on 5 April 2024, taking the name from ZiG digital tokens, which are now available as GBDT.[15] The ZiG is Zimbabwe's sixth attempt since 2008 at creating a new currency that will make it independent of the US dollar.[16]
Since the currency crisis of 2008–2009, Zimbabwe has a multi-currency system. It was introduced in 2009 after the hyperinflation of the fourth Zimbabwean dollar (ZWL). For ten years there was no Zimbabwean currency. However in February 2019 the government introduced the Zimdollar (ZWL) on par with the US dollar, but it was quickly devalued to $2.50 Zimdollars per US-dollar.[17] Briefly, from June 2019 to March 2020, the government required all transactions to be done in Zimdollars; but that quickly proved impractical.[18] Legal use of foreign currencies was restored and they remain legal tender.[19]
By April 2024, the value of the Zimdollar (the RTGS Dollar) had decreased by 99.9% to over one US-dollar equaling $30,000 Zimdollars officially, and even more on the black market.[7] At that time, U.S. dollars accounted for four-fifths of all transactions.[20]
History
In discussions the government decided to issue a new currency backed by gold reserves, the ZiG.[21]
Originally established at $2.50 ZiG to one USD, the ZiG began trading on April 8 at an exchange rate of 13.56 ZiG to one USD.[22] Since its launch, the proportion of transactions conducted in USD has declined from 85% to 70%.[20] The government and the central bank expect the use of ZiG to increase in the country gradually. As an incentive, companies are required to pay fifty-percent of their quarterly taxes in ZiG.[23][24] However, market forces have caused even the government to fail to switch to the new currency. Gift Mugano, a visiting professor of economics at the University of Zimbabwe Business School, said, "The government is [still] refusing its own money to pay for passports, fuel and other services."[25]
By October, 2024, after the first six months of trading, the ZiG had officially lost half its value (27 ZiG to 1 USD), but suffered a seventy-five percent loss on the unregulated market (50 ZiG to 1 USD).[26] In response, in late September the Monetary Policy Committee (MPC) of the Reserve Bank of Zimbabwe tightened monetary policies with the effect of temporarily halting further depreciation.[27][28] However over the next six months the value of the ZiG continued to drop on the unregulated market, so that by the end of February 2025 it was only 5% of its original value.[29] This was despite the fact that the price of gold rose 24% since the so-called "gold-backed" ZiG was issued in April 2024,[29] and the Reserve Bank of Zimbabwe's assertion that over US$400 million has been spent on supporting the ZiG over that same period.[30]
However, since the central bank tightened monetary policy in October 2024, the monthly inflation rate in Zimbabwe, both in terms of the US dollar and the ZiG, in February 2025 had dropped to 0.5% for ZiG and 0.2% for US dollars.[31]
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.[5][34]
The ZiG notes are made from cotton paper, have the Zimbabwe Bird as their watermark, and are all equal in size, measuring 155mm ×65mm (6.1in ×2.6in).
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.[35]
The coins came in several forms: 1 ZiG, 2 ZiG, 5 ZiG. They were introduced on 30 April 2024, along with the banknotes.[37][38]
There are plans to introduce also coins for 1⁄10 ZiG, 1⁄4 ZiG, and 1⁄2 ZiG as well.
Banknotes of the same denominations will not be released.
Conversions
Exchange rates
The Zimbabwean dollar (ZWL) lost about 32% value on interbank in 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.[32][39] 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.[40][41] Zimbabweans were given 21 days to convert their cash into ZiG.[42]
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.[43]
As a result of inflation, on 27 September 2024, the RBZ devalued the ZiG by 42.55% against the US dollar.[44] In the month of September, 2024, consumer prices rose by 37.2% in ZiG terms, compared to just 0.7% in USD terms during the same period. This was compared to a 5.8% rise in ZiG prices over the course of the month before (August).[45]
Zimswitch and banks
All banks and financial institutions were instructed to convert all ZWL balances, obligations, and accounts to the new currency, ZiG.[2]
↑ "Zimbabwe extends multi-currency system to 2030". Reuters. 27 October 2023. Archived from the original on 11 November 2023. Retrieved 24 March 2024. "Settlement of any transaction or payment for goods and services in foreign currency, shall ... be valid until the 31st December, 2030," reads the gazette.
↑ Chingono, Nyasha (5 April 2024). "Zimbabwe launches gold-backed currency to replace battered local dollar". Reuters. Archived from the original on 5 April 2024. Retrieved 5 April 2024. The new currency - called Zimbabwe Gold (ZiG) - will circulate alongside foreign currencies, central bank governor John Mushayavanhu told a press conference in the capital Harare.
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