ON Friday, the Zimbabwe government dumped the Zimbabwe dollar (ZWL) for the second time in the country’s history to introduce a new ‘structured currency’ called Zimbabwe Gold (ZiG).
The market was then given 21 days, from April 5 to convert existing ZWL balances into ZiG.
To convert your ZWL balances to ZiG, the formula is dividing the interbank forex rate conversion into ZWL by the foreign currency exchange rate into ZiG given on any day within the 21 days period.
What do we mean?
On Friday, as an example, the central bank announced a forex rate of US$1: ZWL33 903 and US$1: ZiG13.5616. You divide ZWL33 903 by ZiG13.5616 to get approximately 2 499.9263. This means that ZiG1 is equal to ZWL2 499.9263.
Let us give you an example in applying these calculations.
If you earn ZWL3 390 300 in monthly wages, you multiply this amount by ZiGO.00040001179836 to get ZiG1 356.16. Alternatively, you can divide this monthly wage by ZWL2 499.9263 to get ZiG1 356.16.
To confirm these numbers, if you convert the ZWL3 390 300 into US dollars with Friday’s US$1:ZWL33 903 exchange rate, you get US$100. If you convert this US$100 into ZiG using Friday’s exchange rate of US$1:ZiG13.5616, you get ZiG1 356.16.
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Thus, the formula to determine what ZiG amount your ZWL balances will convert into is determined by the USD/ZWL and USD/ZiG conversion on any given day within the 21 days period after which the USD/ZWL will be scrapped.
