Most of the illegal money changers known as “Osiphatheleni” have abandoned their traditional trading posts in Bulawayo following the government’s launch of the new gold-backed currency, Zimbabwe Gold (ZiG).
The new currency will be backed by the quantity and value of precious metals – especially gold – as well as foreign exchange reserves held by the Reserve Bank of Zimbabwe (RBZ).
Newly appointed Fed Governor, Dr. John Mushayavanhu, last Friday unveiled the country’s new medium of exchange, ZiG, as part of comprehensive policy measures to address exchange rate volatility, reduce inflation, and restore lasting macroeconomic stability.
Delivering the inaugural Monetary Policy Statement (MPS) in Harare, the new central bank chief said the Apex Bank is recalibrating its monetary policy framework to address the current situation of price and exchange rate instability in the economy.
Exchange rate fluctuations and inflation in the economy continued to threaten the prospects of the local currency under the multi-currency system, hence the set of new measures proposed in monetary policy policies, including a new structured currency.
Illegal money changers who spoke to the Chronicle yesterday said there was uncertainty in their business following the introduction of ZiG. Most of them have not been traded since Friday of last week.
Yesterday, the Chronicle news crew took to the streets and noticed that there was no activity in the popular places synonymous with the illegal money transfer business.
The money changers said they were conducting business transactions in US dollars and South African rands only.
A handful of Osiphatheleni can be seen wandering around their usual spots near the Bootleggers Bottle Store and the Tredgold Building.
They said the announcement of the monetary policy statement caught them by surprise, making their actions irrelevant.
“Since the announcement of the new currency, most of us have had to wait for financial institutions and service providers to reconfigure their systems to include ZiG. Since Friday, we have done literally nothing,” said one money changer who asked to remain anonymous.
Another money changer, who also preferred to remain anonymous, said he was optimistic that once the systems were reconfigured, things would return to normal.
“Nothing has changed, the game is still the same. For now, we are just waiting for the systems to be reconfigured to suit ZiG and then we will be back on the streets,” he said.
Another money changer, who identified himself only as Thabo and works near the Bootleggers Bottle Store, said some companies have already standardized rates for multiple currencies.
Most people who had RTGs in their accounts were stranded after stores and other service providers across the country stopped trading in the local currency, as financial institutions were migrating to ZiG.
The unveiling of the new currency comes within the framework of a comprehensive economic reform initiative aimed at addressing ongoing challenges and achieving stability in the economy.
Since then, financial institutions and service providers have been ordered to update and convert their systems to accommodate the new currency.
This is an important milestone in Zimbabwe’s economic journey, and highlights the government’s commitment to promoting economic growth and stability.
Many service providers, such as banks and mobile money agencies, have alerted their customers about the new development and are still busy reconfiguring their systems. Leading mobile communications services provider EcoCash said yesterday that it has completed the transfer.
“We are happy to inform you that EcoCash services have been restored. You can now transact in USD and ZiG,” said a message sent by the company to millions of subscribers. After the notification, some mobile money users were able to check their transferred balance.
FBC Bank wrote to its client: “We are progressing well in converting ZWL to ZiG on our banking system. Functionality tests are underway. Meanwhile, all USD platforms are now available.
RBI Governor Dr Mushayavanhu gave mobile network operators until yesterday to ensure that all their customers seamlessly migrate from ZW$ wallets to ZiG wallets.
He also directed that once the local currency is renamed ZiG, all local traders are expected to constantly adjust their pricing strategy to take into account the currency reforms from the RBI.
Dr Mushayavanhu gave all entities, other than banks and mobile network operators (MNOs), a seven-day deadline from last Friday to complete the configuration of their systems for doing business at ZiG.
Most shops and other formal business entities in Bulawayo were still transacting in US dollars and South African rands for goods and services, as they were still synchronizing their systems with the new gold-backed local currency.
The Chronicle established that major retailers such as OK Zimbabwe, Pick n Pay and Edgars Stores Limited have been inundated with customers seeking to make payments through swipes in local currency, only to be told that only customers with US dollars are being served.
In Beitbridge, the currency change did not affect the movement of people through the border post as travelers largely depend on the South African Rand for their cross-border business.
The Regional Immigration Officer in charge of the Southern Region, Mr Joshua Chibundu, said they were yet to notice any changes in traffic through the Beitbridge border post since Friday.
“Business is proceeding as usual; we have not seen a change in the direction of movement,” he said.
Most money changers in the border town were largely dealing in US dollars and rand transactions.
“At the moment, we are converting rand to US dollars or vice versa only until the newly introduced currency issue is closed. However, we did not feel the change considering that we are in a rand economy in this city where the rand is the largest trading currency,” said one of the money changers. Who requested that his name not be revealed. The situation was the same in most shops where consumers purchased goods and merchandise in rand.
In a statement issued on Saturday, the Fed said the banking sector and payment system providers have made satisfactory progress in converting $ZW balances into ZiG balances since the monetary policy measures were announced on Friday.
“The transfer process to other economic sectors will continue until Friday, April 12, 2024. After that, the Reserve Bank expects that all online payment platforms will operate seamlessly for all transactions in the economy. Event Recording
