New ZiG notes ease cash crunch

The introduction of new Zimbabwe Gold (ZiG) banknotes is beginning to ease cash shortages and improve everyday transactions, although economists say long-term confidence will depend on whether the currency can consistently retain its value.

The new notes - introduced in phases last month - are now circulating through automated teller machines and banking halls in denominations of ZiG10, ZiG20 and ZiG50, improving access to cash for households and businesses.

The Reserve Bank of Zimbabwe (RBZ) has set weekly withdrawal limits of ZiG10 000 for individuals and ZiG100 000 for corporates, as part of liquidity management measures.

Authorities say the currency is backed by strong fundamentals, including approximately US$1,3 billion in foreign currency reserves as of March 31 - nearly double the value of total bank deposits.

Early indications suggest improved availability of physical cash is encouraging wider use of the local currency in transport, retail and informal trade, particularly in urban centres where kombi operators and vendors are increasingly accepting ZiG for small transactions.

Economic commentator George Nhepera said improved note quality and availability had helped lift market sentiment.

"For the first time since 2009, Zimbabwe has introduced high-quality notes that meet international standards and this has positively influenced public and market sentiment," he said.

He added that liquidity improvements were helping restore confidence in day-to-day transactions, while noting that broader inflation expectations were being shaped more by global factors such as geopolitical tensions and oil price movements.

Another economist, Luxon Zembe, said it was still too early to conclude whether the currency had gained lasting public trust.

"It is still too early to address the confidence question. What matters most is value retention, not the physical quality of the notes," he said, adding that stability over several months would be needed to shift perceptions.

He suggested gradual expansion of ZiG usage in key domestic transactions such as fuel and taxes to strengthen its role as both a store of value and unit of account.

Late last year, Treasury said Zimbabwe had entered the final phase of its de-dollarisation roadmap, aimed at laying the groundwork for a potential mono-currency system by 2030.

The country has operated under a multicurrency system since 2009, dominated by the United States dollar alongside other regional currencies.

A member of the RBZ Monetary Policy Committee, Persistence Gwanyanya, said the introduction of the new notes had contributed to relative stability, even amid external economic shocks.

He said improving key attributes of money - such as durability and divisibility - remains central to strengthening confidence in the currency over time.

While early signs point to improved cash availability and smoother transactions, analysts agree that the true test for ZiG will be whether it can maintain stability and purchasing power in the months ahead.