Banks, stock exchange make switch as Zimbabwe’s ZiG continues rally

BREAKING NEWSApril 12, 2024 at 12:29 PM UTC

TLDR

Zimbabwe's ZiG currency gains momentum against the dollar, with businesses increasingly adopting it for transactions.
Over 20 financial institutions and the Zimbabwe Electricity Supply Authority have transitioned to processing electronic payments in ZiG.
The Zimbabwe Stock Exchange recalibrates all indices to accommodate the introduction of the new currency, ZiG.

Zimbabwe's ZiG currency continued its ascent against the dollar for a third day as more businesses transitioned to using it for transactions.

Around 20 out of 27 financial institutions have adjusted their systems to process electronic payments in ZiG, as reported by the national payments platform ZimSwitch. In addition, the Zimbabwe Electricity Supply Authority has shifted its payment processes to ZiG. This marks Zimbabwe's latest attempt to establish a stable local currency.

The Zimbabwe Stock Exchange (ZSE) is also recalibrating all its indices in response to the introduction of the new currency, ZiG. All ZSE indices will be re-based to 100 basis points in light of this change.

Key Takeaways

The introduction of ZiG, or Zimbabwe Gold, represents the nation's sixth attempt to revive its currency. Its predecessor, the Zimbabwe dollar, faced consistent depreciation before being abandoned in April. ZiG is backed by substantial gold reserves and foreign currency holdings, signaling stability aspirations. However, the transition faces hurdles as many banks and businesses are still updating systems for ZiG transactions. Only a third of the financial institutions connected to the national payments platform are equipped to handle ZiG payments, underscoring the challenges of adopting the new currency.

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