RBZ begins production of redesigned ZiG banknotes

Debra Matabvu

THE Reserve Bank of Zimbabwe (RBZ) has started the production of redesigned ZiG banknotes, which will soon be introduced into circulation as part of the central bank’s de-dollarisation roadmap targeting a transition to a mono-currency regime within the next five years.

The new notes will feature enhanced security elements to curb counterfeiting, while improvements in paper quality and durability are expected to make them more resistant to wear and tear.

Many users had complained that the current notes quickly fray, fade and deteriorate, particularly in high-traffic transactions, making them difficult to handle.

Banks and retailers have also raised concerns about the cost and inconvenience of maintaining heavily worn notes, prompting calls for improved quality.

At present, only the ZiG10 and ZiG20 notes are in circulation.

The redesigned series will cover the full range of denominations announced at the launch of ZiG in April last year.

In an interview, RBZ Governor Dr John Mushayavanhu said work on the new notes was now 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 re-designed including improved quality and durability for the convenience of the transacting public.

“In this regard, 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.”

It is standard practice for central banks globally to periodically redesign currency to prevent counterfeiting, incorporate more durable materials and extend the lifespan of banknotes, thereby reducing replacement costs.

The move comes at a time when use of the local currency is rising, with ZiG now accounting for over 35 percent of all transactions, up from 15 percent last year.

Price stability has also held, with the cost of basic goods largely unchanged since October.

In March, food inflation stood at minus 0,5 percent, while non-food inflation was 0,2 percent.

Authorities say this marked stability is laying the foundation for the rollout of a sustainable mono-currency regime.

Dr Mushayavanhu said the Central Bank had stepped up efforts to shore up its foreign currency reserve holdings that underpin the local currency.

“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.

“In this regard, the build-up of foreign currency reserves is just one of the preconditions for successful transition to mono-currency.”

The ZiG currency was introduced in April 2024 to replace the Zimbabwe dollar, with authorities insisting that a solid forex and gold reserves buffer was key to restoring public confidence in the domestic unit.

In a recent interview, Dr Mushayavanhu insisted that the redesigned notes should not be misconstrued as the issuance of a new currency.

“I must reiterate that the Reserve Bank is not going to issue a new currency, and in this regard, the public should not be apprehensive,” he said.

“Instead, the Reserve Bank is merely redesigning the current banknotes to enhance quality in line with international standards.”

Economist and RBZ Monetary Policy Committee member Mr Persistence Gwanyanya said the redesign reflected the authorities’ determination to reinforce confidence in the local currency.

“All this can be construed as measures to restore confidence in the country’s currency and answering a call to introduce better quality notes,” he said.

“It also reflects on the policy maker’s attitude towards the currency. It is also a reflection of the authorities’ seriousness in the local currency’s stability and supporting its permanency.”