Zimbabwe Currency Reforms: Govt Introduces New ZW$100 Note




Mangudya and Mthuli

Zimbabwe has introduced a new ZWL$100 note as inflation ravages the nation.

Announcing the new features of the dollar note in Statutory Instrument (SI) 68A of 2022, Finance Minisster Mthuli Ncube did not spell out the reasons for introducing the dollar note.

According to the Reserve Bank of Zimbabwe, the country is facing galloping inflation and the new note shall be issued in terms of section 40(3) of the Reserve Bank of Zimbabwe Act [Chapter 22:15].

Statutory Instrument 68A reads in part, “On the front side the dominant feature shall be the logo of the Reserve Bank of Zimbabwe (three balancing rocks), with the visually impaired recognition feature to the left, latent image showing the denomination, windowed security strip inscribed “RBZ” with color shift from red to green, watermark with highlighted inscription “RBZ” and see-through of Zimbabwe Bird looking to the left in perfect register, as secondary features.

“On the back side, there shall be an impression of Great Zimbabwe Monument and the Baobab Tree, gold colored iridescent band showing the denomination of the note and see-through of the Zimbabwe Bird looking to the right.”

The RBZ last year introduced ZW$10, ZW$20 and ZW$50 notes

In a statement, the Reserve Bank of Zimbabwe said the Monetary Policy Committee (MPC) of the Reserve Bank of Zimbabwe (the Bank) met on 1 April 2022 to consider developments in the domestic and international macroeconomic environment as well as the impact of global geopolitical factors on the economy.

The RBZ said, “While noting the decline in month-on-month inflation, from 6.99% in February 2022 to 6.31% in March 2022, the Committee was concerned with the escalation in annual inflation, from 66.11% to 72.70%, over the same period. The Committee particularly noted that global inflation was on the increase as a consequence of the on-going Russia-Ukraine conflict which had secondary pass through effects on domestic and international prices.

“Rising prices of oil, gas, fertilizers and other related products had the effect of increasing global inflation and inevitably had a negative impact on domestic costs of production and was destabilising the foreign exchange market. In this regard, the Committee reiterated the need for the Bank to remain focused on inflation reduction and putting in place additional policy measures in response to the resurging inflationary pressures and foreign exchange parallel market activities.”

The RBZ said the Committee resolved to review upwards the Bank Policy Rate from 60% to 80% per annum; review upwards the Medium-Term Bank Accommodation Facility Interest Rate from 40% to 50% per annum; review upwards the minimum deposit rates for ZW$ savings and time deposits from 10% and 20% per annum to 12.5% and 25%, respectively.

The Committee also recommended the tightening of the monetary policy by reducing the quarterly reserve money growth target from 7.5% to 5% for the quarter ending June 2022; liberalising the foreign exchange market by allowing banks to conduct foreign exchange transactions of up US$1,000 under an arrangement agreed upon between banks and the Bank and in terms of which individuals with free funds and entities/corporates holding foreign exchange in their foreign currency accounts (after meeting the statutory surrender requirements) shall be free to sell foreign currency to banks on a willing-buyerwilling-seller basis; and ensuring that commercial imports are processed through normal banking channels in line with international best practice.