By Nomzamo Gwebu, BANO CORESPONDENT
THE Reserve Bank of Zimbabwe (RBZ) has announced a new monetary policy aimed at simplifying financial affairs and ensuring predictability. Under this policy, the RBZ will convert ZW$ balances into a new currency called Zimbabwe Gold (ZiG).
Governor John Mushayavanhu stated that the objectives of the new monetary policy align with regional and global best practices. The policy involves adopting a market-determined exchange rate system, replacing the auction system with a refined interbank foreign exchange market based on willing buyer-willing seller trading arrangements.
The RBZ will provide trading liquidity to the market using 25% of the surrender proceeds from exports.
The statement emphasised the importance of efficient money supply management and states that the RBZ will maintain a tight monetary policy stance to ensure the sustainability of a monetary anchor.
The policy measures aim to contain reserve money growth within the limits of gold and foreign currency reserves.
As part of the new currency structure, the RBZ will introduce ZiG notes and coins in denominations of 1 ZiG, 2 ZiG, 5 ZiG, 10 ZiG, 20 ZiG, 50 ZiG, 100 ZiG, and 200 ZiG.
The initial exchange rate will be determined based on the prevailing closing interbank exchange rate as of April 5th.
The local currency will be anchored on reserves backed by gold and foreign currency balances.
The RBZ has implemented statutory instrument 218 of 2023, which restores the use of multiple currencies in transactions until December 31st, 2030. Additionally, the government will require companies to settle at least 50% of their tax obligations on quarterly payment dates in ZiG.
Outstanding auction allotments will be converted into ZiG and issued as Non-Negotiable Certificate of Deposits (NNCDs) at the current interbank exchange rate, with a maturity period of 24 months and an annual interest rate of 7.5%. Similarly, outstanding payments for foreign exchange purchased by the treasury under the 25% surrender proceeds will be converted into ZiG-denominated instruments with a one-year tenor and an interest rate of 7.5% per annum.
Mobile Network Operators (MNOs) are required to ensure that all their customers can transact from ZW$ to ZiG wallets by Monday, in alignment with the national financial inclusion strategy.
Furthermore, entities other than banks and MNOs must convert prices for goods and services to ZiG within seven days from April 5th, 2024, after completing the necessary system configurations.
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