ZiG currency gets milestone international recognition

THE country’s new Zimbabwe Gold (ZiG) currency has earned global recognition after being registered as an international currency by the World Bank ISO 4217 Committee.

Following the development, Zimbabwe has changed the currency operative codes from ZWL to ZWG with effect from Tuesday this week.

However, the codes ZWL and ZWG will run concurrently from the June 25 to the August 31, 2024 to allow necessary system configurations, the Reserve Bank of Zimbabwe (RBZ) has said.

Economic analysts have described the development as a significant milestone and a bold endorsement of the Government’s currency reforms, which will boost market confidence and increase the usage of the local unit.

Since its introduction early April, the ZiG has continued to defy the odds with marginal gains against the US-dollar amid a stable exchange rate hovering at below US$1:ZiG13.5, keeping prices and parallel market volatility under check.

“The Reserve Bank of Zimbabwe advises that World Bank ISO 4217 Committee has approved our request to change the Zimbabwe Currency Code from ZWL to ZWG (Zimbabwe Gold) effective 25 June 2024,” said the RBZ in a letter addressed to the Bankers Association of Zimbabwe.

“It should also be noted that the minor units of the Zimbabwe Gold shall be denominated as ‘cents’. The codes ZWL and ZWG will run concurrently from the 25th of June to the 31 August 2024 to allow necessary system configurations by players.

“In this regard, the ZWL currency code will cease to be recognised from the 1st of September 2024,” said the Apex Bank.

Lupane State University institutional business analyst, Ms Shynet Chivasa, said the development was a vital step, signifying ZiG’s integration into the global currency basket. She said this is would have multifaceted implications, including bolstering investor confidence, enabling quoting invoices in ZiG by foreign investors, and potentially eliminating black market activities.

“It takes three months for any currency to be registered as an international medium of exchange. Now that the World Bank has registered ZiG, it means that the currency has met laid down international standards,” said Ms Chivasa.

“This is a major milestone for the economy. It means that ZiG is now part of the basket of international currencies. The registration by the World Bank of ZiG as an international currency has multi-faceted implications.

“This brings much-needed investor confidence, meaning that foreign investors can now quote invoices in ZiG. Another positive effect is that of possibly eradicating the black market.”

To maximise these benefits, active marketing campaigns and awareness programmes, both domestically and regionally are needed, she said, adding that the Central Bank’s role in promoting ZiG’s international recognition, trade utility, and market stability is paramount for its success.

“There will be a need for an enhanced publicity campaign by the central bank locally and internationally. Locally, people need to know that ZiG is now an international currency that could be used as a medium of trade everywhere,” said Ms Chivasa.

“That would help reduce demand for foreign currency and also eradicate the black market sector. Also, it is critical for neighbouring countries to key institutions to be apprised of the development to reduce transactional barriers.”