Presenting the Mid-Term Monetary Policy Review last week, Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu said the currency’s performance was evidence of a disciplined approach to policy-making. “This comes at a time when the Reserve Bank has consistently walked the talk and stayed the course of durably anchoring and fostering price, currency and exchange rate stability, since the introduction of ZiG in April 2024,” he said.
The bank’s stance, he added, has kept money supply growth consistent with targeted inflation and economic expansion.
The Government projects Gross Domestic Product growth of 6 percent in 2025, a marked improvement from the 1,7 percent expansion in 2024, which suffered from the negative impact of the El Niño-induced drought.
Foreign currency inflows reached US$7,2 billion in the first half of 2025, up from US$5,9 billion a year earlier, largely driven by exports and diaspora remittances, providing significant latitude for durable local currency stability.
This has allowed the bank to build reserves and intervene in the foreign exchange market to smooth volatility.
Month-on-month ZiG inflation has averaged 0,6 percent between February and July, while annual inflation is expected to end the year at about 30 percent, down from elevated levels in early 2025.
For the financial sector, currency stability has prompted a structural shift in earnings.
According to brokerage FBC Securities, banks remained profitable in the first half of 2025, though net profit fell to ZiG5 billion (US$184 million) from ZiG10,4 billion (US$760 million) in the same period last year.
Data from the first half of 2025 shows a complete disappearance of revaluation gains on investment property and translation gains on foreign currency assets, which in the same period of 2024 made up over half of total earnings.
Instead, banks are now drawing most of their income from traditional operations.
Income is now being generated primarily from interest on loans, which contributed 31,91 percent of total revenue, and fees and commissions, which made up 45,37 percent.
This, said FBC Securities, “indicates a more stable operating environment, more predictable and better aligned with sound banking practices”.
Profitability margins have narrowed, with return on assets at 4,4 percent and return on equity at 12,8 percent, but analysts argue the earnings base is now grounded in genuine intermediation and economic activity.
Mr Raymond Madziva, a banker, said the ZiG’s steadiness had provided lenders with greater clarity in managing their balance sheets. “For the first time in years, we can model our loan books without constantly second-guessing the exchange rate.
This is restoring confidence not only for banks but also for clients who transact in ZiG,” he said.
However, he warned that the loss of currency-related windfalls requires a more disciplined growth strategy. “The post-revaluation environment means banks must double down on core lending, fee-based services and digital products to sustain profitability. “The discipline this requires will make the sector stronger over time,” Mr Madziva added.
Economists have welcomed the improved monetary conditions but cautioned that sustaining stability will depend on continued fiscal discipline and steady foreign currency inflows.
A drop in commodity prices or remittances could quickly test the currency’s resilience.
For now, low monthly inflation, a firmer exchange rate and a banking sector anchored on core income streams have lifted confidence in the domestic currency.
The Reserve Bank has pledged to continue intervening in the market when needed to ensure the Willing-Buyer Willing-Seller exchange rate reflects genuine supply and demand.
If these conditions hold, the ZiG’s early record of stability could offer the country’s financial system its most solid footing in years, and a platform for banks to build on more sustainable, rather than speculative, earnings growth.
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