The Reserve Bank of Zimbabwe (RBZ) has ruled out introducing ZiG50 and ZiG200 to the market anytime soon over fears the bigger notes will fuel inflation.
Speaking during a Chamber of Mines of Zimbabwe 2024 annual conference held in Victoria Falls on Thursday, RBZ governor John Mushayavanhu said the central bank would rather introduce more of the smaller denominations to address the shortage of change. Said Mushayavanhu (via <a href="https://www.newsday.co.zw/local-news/article/200027606/rbz-holds-zig50-zig200-from-circulation">NewsDay</a>):
<blockquote>
Since we introduced the ZiG, the economy has continued to grow across all sectors and we have not seen any negative results or disruptions.
We have introduced most of the cash denominations that we said we were going to. We have got ZiG1, ZiG2, ZiG5, ZiG10 and ZiG20 in circulation now.
We are going to put more of the smaller denominations because we want to make sure that the problem of change is immediately alleviated.
We have been very shy when it comes to introducing bigger denominations because psychologically, these denominations are inflationary. We do not see a reason to introduce the ZiG50 or ZiG200.
We have them, we have printed them, but it will take a bit of time before we put them on the market.
</blockquote>
ZiG notes and coins remain scarce in the market because they are not readily available through banks. These shortages are hurting various sectors, including transport, supermarkets, and the informal market.
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RBZ Holds Onto ZiG50 And ZiG200 Notes

The severe scarcity of ZiG banknotes and coins in circulation can be attributed to the Reserve Bank of Zimbabwe’s (RBZ) reluctance to distribute the new currency en masse over concerns that releasing the notes and coins all at once could inadvertently fuel the growth of the parallel market, it has emerged.
The government launched the ZiG on 05 April 2024, in an attempt to stabilise the economy, which has been unstable for the past 25 years.
The gold-backed currency replaced the Zimbabwean dollar, the RTGS, which had lost three-quarters of its value in the year it was replaced.
The new ZiG banknotes and coins that came into circulation on 30 April are in denominations of between 1 and 200.
However, the ZiG physical cash remains in short supply and this has significantly impacted millions who depend on cash for their daily needs, including people working in the informal economy.
The situation has led to many Zimbabweans having to budget more for basics just to make it through the day.
Speaking at a breakfast meeting hosted by the Zimbabwe Economics Society in Harare, RBZ deputy governor Innocent Matshe said the central bank deliberately limited the amount of cash injected into the economy to starve the parallel market. He said (via <a href="https://www.newsday.co.zw/business/article/200027220/zim-applies-for-iso-code-for-zig">NewsDay</a>):
<blockquote>
Due to the situation in our country, where a parallel market drove approximately 80% of economic activities, it was crucial to ensure that we did not supply all the new currency at once. Therefore, we limited the amount of cash injected into the economy.
Although challenges persist, they will evolve. Most financial institutions have received sufficient small denominations of the currency to address these issues.
You may wonder, why issues persist. These issues are systemic but will be resolved as the currency becomes more widely available.
The stability of the exchange rate will reflect the true value of the economy and the purchasing power of the currency, boosting domestic demand and supporting industrialisation in trade.
</blockquote>
The ZiG will co-circulate with other foreign currencies in the economy. However, the US dollar, which accounts for over 80 of transactions, will remain legal tender.
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"ZiG Shortage A Strategy To Starve Parallel Market"

Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, has gazetted the features of the Zimbabwe Gold (ZiG) coins, whose circulation is expected to start on 30 April 2024.
The ZiG currency was introduced by Reserve Bank of Zimbabwe (RBZ) Governor, John Mushayavanhu, when he presented his first Monetary Policy Statement on April 5 2024.
The features are contained in Statutory Instrument 75 of 2024 cited as the Reserve Bank of Zimbabwe (Issue of ZiG Coins) Notice, 2024.
The ZiG coins will be issued in denominations of one ZiG, two ZiG and five ZiG. Reads the notice:
<blockquote>
It is hereby notified that the Minister of Finance, Economic Development and Investment Promotion has, in terms of section 44 D (2) of the Reserve Bank of Zimbabwe Act made the following notice specifying the matters determined by the President.
The design of the ZiG coins shall be— (a) on the observe side of all the ZiG coins, an impression of the Zimbabwe Bird looking to the left, and around shall be the inscription “ZIMBABWE” with the year of manufacture; (b) on the reverse side— (i) in the case of the one ZiG coin, an impression of the Flame Lily and the inscription “1ZiG” to the bottom right of the impression of the Flame Lily; (ii) in the case of the two ZiG coin, an impression of the Great Zimbabwe Monument and the inscription “2ZiG” to the top right of the impression of the Great Zimbabwe Monument; (iii) in the case of the five ZiG coin an impression of the Victoria Falls and the inscription “5ZiG” to the top right of the impression of the Victoria Falls; (c) a diameter of— (i) in the case of the one ZiG coin, 20 millimetres with a plain edge; (ii) in the case of the two ZiG coin, 20,09 millimetres with a fully serrated edge; (iii) in the case of the five ZiG coin, 24,09 millimetres with an interrupted milling edge.
</blockquote>
The notice further states that the one ZiG shall consist of 92,94 per cent steel and 7,06 per cent nickel (Nickel plate on a steel core) and weigh 3,75g while the two ZiG will be made up of nickel plate (25 microns on steel core, that is, 94 per cent steel and 6 per cent nickel) with a standard mass of 5,3g.
The five ZiG shall consist of a nickel plate (25 microns on steel core, that is, 94 per cent steel and 6 per cent nickel) with a standard mass of 7,5g.
Meanwhile, the ZiG banknotes, which are also expected to be released next Tuesday, are denominated in 10ZiG, 20ZiG, 50ZiG, 100 ZiG and 200 ZiG.
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