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Zimswitch, EcoCash roll out new currency

by Staff reporter
09 Apr 2024 at 06:18hrs | Views
FOLLOWING the unveiling of the new currency last Friday, the country's sole national payments platform and clearing house, Zimswitch, yesterday announced that it had completed the rollout of the ZiG processing system.

 Under the new system,  person-to-person transaction limits have been set at ZiG2 400 while the monthly transaction limit is ZiG8 000.

The largest local mobile money platform, EcoCash  Holdings, also notified its customers yesterday that it had successfully converted Zimbabwean dollars to the new gold-backed ZiG currency.

"Dear customer, we are pleased to advise that EcoCash services have been restored. You can now transact on USD and ZiG. Thank you for your patience and support," read a generic message to subscribers.

Zimswitch said an individual could send up to ZiG2 400 per single transaction, but their overall monthly limit would be ZiG8 000.

Although some people struggled to understand the new system and how to make payments, there was overall optimism that the new currency would bring economic stability.

As of yesterday, NMB Bank had not yet completed the conversion.

"Valued client, please note that our conversion to ZiG is still underway. In the interim, you can perform USD transactions across all our channels," read part of  an NMB Bank statement.

Zimswitch was incorporated in 1994 to process domestic card-based (ATM and POS) and EFT transactions among  member financial institutions in real time online.

Zimbabweans have pinned hopes on the newly introduced gold backed currency, saying it might be a solution to inflation that has destabilised prices in recent weeks.

Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mushayavanhu last week introduced the new currency which is backed by the country's gold and foreign currency reserves, and precious metals.

ZiG notes and coins will start circulating on April 30, but the electronic banking systems should be operational this week.

In interviews yesterday, most people said they believed ZiG would address the country's currency volatility and other economic challenges.

Mr Silas Mukoto of Harare said people should embrace the ZiG and use it with confidence so that it does not lose its value.

"In my opinion, the new currency is good although there might be some confusion at its introduction. We had been buying foreign currency on the parallel market using RTGS and this new currency gives us hope.

"I am glad that this is real money and it will be a better way of transacting," he said.

Mr Tarasikirwa Bumba from Mabvuku suburb was happy that the country now had a proper currency and urged people to embrace it.

"This ZiG money seems to be good since it is backed by gold, but the RBZ that are outside those backed by gold. If we embrace this new currency, things will change positively and the parallel market will suffocate."

A number of institutions began converting their systems last Friday, with financial institutions and payment system providers notifying their clients of suspension of Zimbabwe dollar transactions pending a switch over to ZiG.

Mrs Aisha Mohammed from Belvedere said: "The money should be heavily advertised so that we all know this new currency. We hope its introduction will bring positive changes in the economy and that we will not go back to the 2008 era."

With the huge conversion in progress by banks and mobile money platforms of all local currency accounts, all digital platforms have been unavailable since Friday except prepaid Mastercard transactions.

Generic messages from banks and mobile money platforms yesterday suggested that services would resume soon.

Dr Mushayavanhu noted on Saturday that banks and payment system providers had made satisfactory progress in converting the Zimbabwe dollar balances into ZiG balances since the announcement of the changeover.

"The conversion process will continue for other economic sectors until Friday, April 12, 2024. Thereafter, the RBZ expects that all the online payment platforms will be operating smoothly for all transactions in the economy," he said in a statement.

Following the announcement of the monetary policy statement, President Mnangagwa gazetted Statutory Instrument 60 of 2024, which gave the transacting public a transitional period of up to 21 days to convert their Zimbabwe dollar notes and coins to ZiG.

"Accordingly, the ZW$ notes and coins will continue to be used for transactional purposes at the ZiG: ZW$ conversion factor of 2 498.7242 applicable on April 8 within the 21-day transitional period," said Dr Mushayavanhu.

The new ZiG notes and coins will start circulating in the economy on April 30, to allow the RBZ to undertake an intensive educational and awareness campaign on the key security features of the ZiG notes and coins.

The campaign is expected to reach out to a wide spectrum of society consistent with the bank's financial inclusion thrust.

"The Reserve Bank further advises the public that the issuance of new currency is always preceded by this important process. The Reserve Bank is taking all the necessary steps to ensure that the public is not prejudiced and there is value preservation and transactional convenience during this transitional period," said Dr Mushayavanhu.

Political analyst and international relations guru, Trynos Jujuju said it was important that the citizens maintained confidence in their currency.

Jujuju said the new currency and measures were simple to understand yet a critical economic strategy.

"As it is, the new currency appears to be the strongest currency in the region. According to the gold standard principles, this is one of the best measures the Government took in order to arrest inflation and ensure that the trading citizens enjoy the easy and convenient way of trade.

"The introduction of the currency reforms is one of the measures to manoeuvre in this turbulent environment where restrictions are wreaking havoc to the country. It is critical that every Zimbabwean works together with Government for the development and betterment of all," he said.

Source - The Herald