• The new ZiG series incorporates enhanced durability resolving quick fading/fraying issues from original 2024 notes, advanced security features to curb counterfeiting, and better usability
• Postponed since mid-2024 over inflation fears, the rollout of ZiG50 and planned higher indicates sustained stability, annual inflation dropped to 3.8% in February, reserves grew to US$1.2 billion
• Despite gains, ZiG usage stays limited with businesses/government reluctant to fully adopt it for key transactions

Harare- The Reserve Bank of Zimbabwe (RBZ) has announced that redesigned Zimbabwe Gold (ZiG) banknotes in denominations of ZiG10, ZiG20, and ZiG50 will enter circulation on April 7, 2026, with the ZiG100 and ZiG200 to follow in due course as economic conditions permit.

The announcement, made as part of the 2026 Monetary Policy Statement presented by Governor Dr John Mushayavanhu on February 27, marks a significant step in the central bank's ongoing effort to deepen the use of the local currency in an economy that has stubbornly refused to let go of the US dollar.

Crucially, the existing ZiG notes will remain legal tender and continue to circulate alongside the new ones, meaning this is a transition rather than a replacement.

The decision to redesign the notes was driven by a combination of practical and strategic imperatives. The original ZiG banknotes, introduced in April 2024, quickly became a point of public frustration not just because of the currency's broader credibility challenges, but because of the poor physical quality of the notes themselves.

The transacting public noted that the banknotes quickly faded and became frayed and difficult to handle, while merchants and banks indicated challenges in maintaining the usability of worn-out notes. The RBZ responded by incorporating feedback gathered through stakeholder consultations, redesigning the notes to be more durable and incorporating enhanced security features to combat counterfeiting, both of which are standard practices for central banks globally seeking to reduce replacement costs and protect the integrity of their currency.

Beyond the physical improvements, the rollout of higher denominations carries a strategic message. When the ZiG was first launched, the release of the ZiG50, ZiG100, and ZiG200 notes was postponed due to concerns that their release would "fuel inflation."

That the RBZ now feels confident enough to release the ZiG50  and signal that ZiG100 and ZiG200 are coming reflects a genuine shift in the macroeconomic environment.

Annual inflation has fallen to single-digit levels for the first time in nearly three decades, declining to 4.1% in January 2026 further down to 3.8% in February. Official reserves backing the ZiG have also grown substantially, rising from US$276 million when ZiG was introduced to US$1.2 billion by December 2025.

The RBZ has been emphatic that the note rollout will not expand money supply, banks will simply exchange their existing electronic balances held at the central bank for physical cash, meaning no new liquidity enters the system.

Yet the deeper challenge Zimbabwe faces is not the quality of its banknotes. It is demand. The ZiG was introduced in April 2024 as a gold-backed currency meant to anchor value and arrest the chronic cycle of depreciation that had destroyed its predecessor, the Zimbabwe dollar (ZWL).

Despite reserves now growing to US$1.2 billion, the currency's penetration into everyday economic life remains limited.

Zimbabwe's formal economy accounts for only a fraction of actual economic activity. By conservative estimates, around 65% of the economy is informal, but using the actual volume of transactions that take place daily on the streets, in markets, and between households, the informal sector likely constitutes above 80% of real economic activity.

And within that informal sector, the currency of choice is overwhelmingly and unapologetically the US dollar. Vendors selling tomatoes, vendors of second-hand clothes, kombi operators, market traders, virtually all of them price and transact in US dollars. The ZiG, when it appears at all in these settings, is often reluctantly accepted and quickly offloaded.

To say the ZiG accounts for 40% of transactions is therefore to describe a largely formal-sector phenomenon.

The picture at the macroeconomic level reinforces this. Corporate earnings in Zimbabwe skew heavily toward the US dollar, with the majority of large companies reporting 80% or more of their revenues in USD, particularly in sectors like mining, retail, manufacturing, and financial services. This is not coincidence, it is a rational response by businesses to years of local currency volatility.

The government's own behaviour has not helped. Market forces have caused even the government to fail to switch to the new currency, with the government still refusing its own money to pay for passports, fuel, and other services. When the state itself signals reluctance to accept ZiG for key transactions, it becomes very difficult to convince the private sector or ordinary citizens to do otherwise.

The battle for the ZiG is, at its core, a battle for demand, and demand for any currency is ultimately a vote of confidence. These new banknotes will continue to serve their most reliable niche, paying for vegetables at the market, bus fares, small-scale retail. Expanding beyond that requires not just better notes, but a track record of sustained stability that Zimbabwe is still building.

To understand why that track record is so difficult to establish, one must trace the history of Zimbabwe's currency, a story that reads less like a chapter in monetary economics and more like a cautionary tale repeated across generations.

Zimbabwe's currency journey began after independence in 1980, when the Zimbabwean dollar was introduced at parity with the US dollar and, for a time, traded at a premium. The economy was relatively well managed through the 1980s, and the currency held its value.

But the 1990s brought economic liberalisation that was poorly sequenced, and the government's decision to send troops into the Democratic Republic of Congo in 1998 , financing the adventure through the central bank, proved a turning point.

Land reform from 2000 onwards collapsed agricultural output, triggering a spiral of shortages, money printing, and loss of confidence. By the mid-2000s, Zimbabwe was experiencing inflation unlike almost anything the modern world had seen. "Black Friday",  November 14, 1997,  is remembered as the day the Zimbabwe dollar crashed by 75% in a single afternoon, the first dramatic signal that the currency's foundations were being eroded. It would prove a harbinger.

By the early 2000s, the official printing of banknotes could not keep pace with inflation fast enough, and the government introduced bearer cheques, quasi-currency instruments technically meant to be temporary, in denominations that grew with dizzying speed as inflation accelerated.

Bearer cheques gave way to ever-larger denominations, then to redenomination, as the RBZ slashed zeros off the currency to keep it usable. The Reserve Bank redenominated the Zimbabwean dollar three times, in 2006, 2008, and 2009, each time stripping zeros that inflation had rendered meaningless within months.

By 2008, Zimbabwe experienced one of the worst hyperinflation episodes in recorded history, with prices doubling within days, sometimes hours. Supermarkets changed prices repeatedly in a single day, and workers rushed to spend wages immediately after being paid because their value evaporated almost overnight.

The central bank printed higher and higher denomination notes — from thousands to millions, billions, and eventually trillions, before the Zimbabwe dollar was abandoned entirely.

In 2009, Zimbabwe dollarised, adopting a multi-currency basket dominated by the US dollar and the South African rand. For nearly a decade, this brought a degree of stability that ordinary Zimbabweans had not experienced in years.

Shops were stocked, inflation was tamed, and confidence, while fragile, returned to the economy. The dollarisation era is remembered with nostalgia by many, even as economists debated its long-term sustainability given Zimbabwe's lack of control over monetary policy.

The government's desire to reclaim monetary sovereignty led to the introduction of bond notes in 2016, coins and notes officially pegged at par with the US dollar but never genuinely accepted as equivalent by the market.

The parallel market instantly priced them at a discount. In February 2019, the government formalised a new Zimbabwe dollar (ZWL), initially introduced at parity with the US dollar before rapidly devaluing. By 2022, the ZWL was haemorrhaging value monthly, triggering a renewed cycle of inflation, parallel market premiums, and public despair. Inflation in ZWL terms at times exceeded 300% annually, and the unofficial exchange rate ran far ahead of the official rate, distorting every corner of the economy.

By April 2024, the value of the Zimbabwe dollar had decreased so much that the exchange rate was 30,000 ZWL per US dollar officially, and even more on the black market. At that time, US dollars accounted for four-fifths of all transactions.

It was in this environment that the ZiG was born, Zimbabwe's sixth attempt at a functioning local currency in under two decades. The ZiG started at 13.56 to the US dollar, was backed by gold and foreign currency reserves, and was presented as structurally different from its predecessors precisely because of that tangible asset backing.

But within six months, the ZiG had officially lost half its value, and the RBZ was forced to devalue it by 42.55 percent against the US dollar in September 2024.

The parallel market, as ever, ran even further ahead.

Since that devaluation, the RBZ has tightened monetary policy aggressively, and a degree of stability has returned. The exchange rate has traded in a narrow band, inflation has fallen to single digits, and reserves have grown. These are real gains, and they provide the macroeconomic foundation for the April 7 note rollout.

But the ZiG's long-term success depends on something that new banknotes cannot manufacture: trust. That trust must be earned daily, through consistent policy, fiscal restraint, and a willingness by the state itself to accept and use its own currency in every transaction it conducts.

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