Source: New ZiG banknotes improve liquidity, market stability – herald
Moffat Mungazi
Business Reporter
THE injection of upgraded BiG5 ZiG banknotes into circulation by the Reserve Bank of Zimbabwe (RBZ) earlier this week has significantly improved liquidity, with the market maintaining stability and avoiding sharp price increases for basic commodities and spike in the parallel market exchange rate, thereby deflecting inflationary pressures.
The new banknotes were immediately embraced by the business community and the general public in Manicaland, with both readily transacting using them.
The RBZ said the higher ZiG100 and ZiG200 denominations will be rolled out in a phased manner, guided by transactional demand and monetary and financial conditions in the domestic economy.
The Central Bank has maintained tight control over money supply since introducing ZiG in April 2024.
This approach has helped sustain the country’s annual inflation rate in single digits, which stood at 4,1 percent in January, as the Government maintains measures to drive the rate down further throughout the year.
A comprehensive survey conducted by The Manica Post across Manicaland indicates that liquidity has increased, while the market has largely remained stable.
Virtually all banks and financial institutions in the province were dispensing the upgraded BiG5 ZiG banknotes at Automated Teller Machines (ATMs) and inside banking halls, particularly the ZiG10, ZiG20, and ZiG50 denominations.
A bank manager in Mutare, who declined to be named citing protocol, said the arrangements in place had eased pressure on their operations.
“We received sufficient quantities of the new banknotes from the Central Bank and had no problems dispensing them to the public, both inside the bank and at ATMs. Demand is high, but cash withdrawals have been seamless so far, without any issues. Given how things have gone, the public is showing a lot of confidence in the new notes,” he said.
In the retail sector, it was business as usual, with prices remaining unchanged.
Supermarkets, shops, and small traders are readily accepting the new banknotes for transactions.
The Manica Post news crew witnessed customers using the new banknotes for over-the-counter payments at supermarkets, pharmacies and fast food outlets, among others.
The commuting public is also using them to pay daily fares.
A Mutare vendor, Ms Nancy Sachimbo, commended the durability of the BiG5 ZiG banknotes.
“All good money must be durable. We handle cash every day as we transact regularly, and this requires notes that do not wear out easily. From their physical appearance, these new notes look like they have that durability. Because they are also circulating with the old note series, it will greatly minimise the risk of them being torn and soiled. This is good money,” she said.
Ms Sachimbo said the new notes’ improved security features will help the money withstand frequent handling, adding that the enhanced features were key in preventing counterfeit notes.
She commended the Reserve Bank of Zimbabwe (RBZ) for rolling out comprehensive countrywide educational and awareness exercises in February before unveiling the money.
Ms Sachimbo said increased circulation of the ZiG coins will bring greater convenience in transactions.
The RBZ said the ZiG coins, introduced on April 5, 2024 and re-issued in sufficient quantities, including the ZiG1, ZiG2, and ZiG5 denominations, will remain in circulation to support small-value transactions and reduce pressure on low-denomination notes.
Mr Stanley Chiruka, who operates hardware shops in Buhera, Chimanimani, and Chipinge, said they welcome the upgraded ZiG banknotes.
“As a business, we have always embraced and encouraged the use of local currency. We have been accepting the old ZiG notes for purchases at our shops and giving them as change to our customers. The new notes will enhance liquidity for both us and our customers, promoting the ease of doing business,” he said.
In Rusape and Nyanga, the parallel market exchange rate has remained unchanged since the new notes started circulating.
Mr Robert Maunze, a street forex dealer, said they were still trading at around ZiG30 to ZiG32 for US$1.
“Nothing has changed, there has been no upward jump at all in the exchange rate. We are still using the old rates of ZiG32-US$1, and this has been the case for a long time now,” he said.
The upgraded BiG5 ZiG banknotes, designed to be more durable and of superior quality to the old ones, are backed by several precious minerals, especially gold, and other foreign reserves.
RBZ Governor, Dr John Mushayavanhu, said the Central Bank remains committed to maintaining prudent monetary policy management to uphold present and future price, currency, and exchange rate stability.
He urged the public to embrace and use the upgraded BiG5 ZiG banknotes with confidence.
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