Source: ‘New banknotes in the shortest possible time’ | The Sunday Mail
Dr John Mushayavanhu Debra Matabvu
THE central bank is making concerted efforts to ensure delivery of new Zimbabwe Gold (ZiG) banknotes “in the shortest possible time”, Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu has said.
However, he cautioned that design and rollout of the notes ordinarily ranges from six months to two years in some jurisdictions.
“The Reserve Bank is working on enhancing the quality and design of the ZiG banknotes in line with international standards, as promised in the 6 February 2025 Monetary Policy Statement,” he said.
“Empirical evidence from across jurisdictions suggests that the design and rollout of new currency notes is a specialised process that can take some time, usually ranging from a minimum of six months to two years.
“In this context, the Reserve Bank is making concerted efforts to ensure the delivery of the new ZiG banknotes in the shortest possible time, considering all the critical steps involved in the design and rollout process.”
Yesterday, ZiG marked a year after its launch.
The central bank believes the de-dollarisation road map is gaining traction amid continued stability of ZiG and prices of basic goods, paving the way for a transition to a monocurrency regime in the next five years.
Currency and price stability, Dr Mushayavanhu said, are the main anchors of de-dollarisation and transition to a monocurrency regime, hence the Government will continue to implement measures to strengthen the local currency.
Local currency transactions currently account for about 35 percent of all settlements in the economy, representing an increase from around 15 percent last year.
Basic prices have also remained unchanged since October last year following various measures introduced by the Government.
Food inflation stood at minus 0,5 percent, while non-food inflation was 0,2 percent in March this year.
“The de-dollarisation road map is crucial for restoring confidence in the local currency. The Reserve Bank believes in a gradual and market-driven approach to de-dollarisation that will ensure the country gradually and sustainably transitions to a monocurrency regime by 2030,” he said.
“In this regard, gradual and incremental but notable milestones should be achieved along the way. The gradual approach will ensure that no disruptive shocks are introduced to the economy, which may result in bank runs and reversal of the anticipated gains from de-dollarisation.
“As such, currency stability should underlay the de-dollarisation process. Country experiences have amply shown that sustained price stability is the single most significant precondition for successful de-dollarisation.”
The Reserve Bank is confident that currency and price stability will continue until the end of the year.
“In the same vein, month-on-month ZiG inflation, which spiked in October 2024 following the sharp exchange rate depreciation, and again in January 2025 after a shock in rental prices, has remained low on average, and moderated to 0,5 percent in February 2025 and -0,1 percent in March 2025, therefore anchoring inflation expectations,” Dr Mushayavanhu added.
“In the outlook period, the stability of ZiG, anchored by the tight monetary policy stance, is expected to remain sustainable, thus durably anchoring price and exchange rate expectations.
“The continuation of this trend is expected to result in end-2025 annual inflation being contained to below 30 percent, which is consistent with the achievement of the projected 6 percent growth in real GDP (gross domestic product) in 2025, anchored by exchange rate stability to the economy.”
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