Published: 3 hours ago

The Reserve Bank of Zimbabwe (RBZ) has commenced production of redesigned ZiG banknotes, set to enter circulation soon as part of the central bank's de-dollarisation roadmap, which targets a transition to a mono-currency regime within the next five years.

The new notes will feature enhanced security features to deter counterfeiting, alongside improvements in paper quality and durability to reduce wear and tear. Users have long complained that current ZiG notes quickly fray and fade, creating inconveniences for retailers and banks who bear the cost of replacing worn-out notes.

Currently, only ZiG10 and ZiG20 notes are in circulation. The redesigned series will expand to cover the full range of denominations announced when the ZiG was launched in April 2024.

RBZ Governor Dr John Mushayavanhu confirmed that the redesign work is at an advanced stage.

"The Reserve Bank is working on the modernisation of the ZiG banknote series as advised in the recent mid-term Monetary Policy Statement," said Dr Mushayavanhu. "The new ZiG banknotes will be redesigned including improved quality and durability for the convenience of the transacting public. The production process of the improved banknotes has progressed well and is at an advanced stage. The public will be advised of the expected roll-out at the appropriate time."

He stressed that the move should not be mistaken for the introduction of a new currency.

"I must reiterate that the Reserve Bank is not going to issue a new currency. Instead, the Reserve Bank is merely redesigning the current banknotes to enhance quality in line with international standards," he said.

Globally, it is standard practice for central banks to periodically redesign notes to prevent counterfeiting and extend their lifespan.

The redesigned banknotes come as use of the ZiG rises, now accounting for over 35% of all transactions, compared to 15% last year. Price stability has also held firm, with food inflation at minus 0,5% in March, while non-food inflation stood at 0,2%.

Authorities say this stability is creating a solid foundation for the country's gradual transition to a mono-currency regime.

Dr Mushayavanhu added that the central bank is actively accumulating foreign currency reserves to back the ZiG and reinforce confidence.

"The Reserve Bank is strategically accumulating foreign currency reserves to support the transition to mono-currency and to ensure sustainability of the local currency," he said.

The ZiG, introduced in April 2024 to replace the Zimbabwe dollar, is backed by a mix of foreign currency and gold reserves - a safeguard officials argue is critical for restoring public trust.

RBZ Monetary Policy Committee member and economist, Persistence Gwanyanya, said the redesign underscores the authorities' commitment to currency stability.

"All this can be construed as measures to restore confidence in the country's currency and answering a call to introduce better quality notes," Gwanyanya said. "It also reflects the policy maker's attitude towards the currency and demonstrates seriousness in ensuring its permanency."
- The Herald