While the US dollar has been critical in ensuring stability and low inflation, the currency is too strong for a developing economy, rendering local produce less competitive in global markets while limiting the authorities’ ability to influence the pace of growth.
Efforts to revert to a domestic monocurrency have suffered from previous episodes of high inflation.
The country’s month-on-month ZiG inflation has been low and stable at less than 1 percent for the past three months, according to the Zimbabwe National Statistics Agency (ZimStat).
The central bank forecast monthly inflation, which has averaged 0,6 percent since February, to remain below 3 percent through 2025.
Although the annual rate remains elevated, due to the base effect following the devaluation-induced spike in October last year, it is expected to moderate to around 30 percent by the end of this year.
The central bank devalued the local unit in October to address pricing distortions caused by a wide discrepancy between the official and parallel market exchange rates, which have since been resolved.
Notably, the parallel market exchange rate premium has since narrowed from 100 percent early last year to less than 30 percent, demonstrating the effectiveness of tight monetary and fiscal policies.
The trend demonstrates that the country has since struck the right codes policy-wise since the introduction of the gold-backed local currency in April last year, which has resulted in durable stability and a drastic fall in monthly inflation.
According to the central bank, the stable macroeconomic conditions have also resulted in increased usage of ZiG in the economy.
The proportion of ZiG in the National Payment System electronic transactions rose from 26 percent in April 2024 to over 40 percent in June 2025, reflecting increased usage of ZiG.
In addition, local currency cash usage in the economy has increased, the bank noted.
The RBZ is confident that by 2030, Zimbabwe’s economy will have all key fundamentals in place to support a domestic mono-currency, a prerequisite for accelerated and sustainable development globally.
These include stable local currency, low inflation and highly productive key sectors of the economy.
To achieve this goal, the central bank plans to develop a “de-dollarisation road map”, which the bank says will be crystallised in the upcoming National Development Strategy 2 (NDS2), which will replace the current NDS1.
NDS1 was the initial five-year medium-term plan designed to guide the development trajectory towards the realisation of Zimbabwe’s Vision 2030 of becoming an upper-middle-income society.
Zimbabwe needs a domestic mono-currency, like Zimbabwe Gold (ZiG), to regain control over its monetary policy, manage inflation and foster long-term economic planning.
While a multi-currency system, such as the one currently being used, can offer long-term stability, it limits the Government’s ability to influence its economy and can hinder export competitiveness.
The planned currency road map announcement in the central bank’s 2025 Mid-Term Monetary Policy Review and reinforced at a stakeholders’ breakfast meeting in Harare on Friday, comes amid growing calls from industry leaders for greater clarity and assurances to safeguard economic stability during the transition.
This comes after Zimbabwe adopted the ZiG in April last year to replace the Zimbabwe dollar, which had become susceptible to frequent bouts of high inflation, which destabilised the economy.
Zimbabwe’s economy has experienced increased stability since the new currency was introduced, with monthly inflation remaining largely low and within policy targets, while the parallel market rate of the now-stable ZiG has narrowed considerably.
This has significantly improved business and public confidence, allowing for more predictable planning and creating conditions for sustainable growth.
The Treasury has forecast Zimbabwe’s economy to grow by 6 percent this year, 4 percentage points faster than the predicted 2 percent expansion in 2024, when the EL Niño-induced drought weighed on agriculture, a key sector of the economy.
RBZ Governor Dr John Mushayavanhu emphasised in the Mid-Term Monetary Policy Review that “the road map will crystalise in the National Development Strategy 2, under the stewardship of the RBZ, which chairs the NDS2 Thematic Working Group on Macroeconomic Stability and Financial Deepening (MESFIND). ” “While the policy’s ultimate goal is clear, its design will undoubtedly encapsulate the need to maintain current stability, preserve foreign currency accounts and respect existing USD-denominated contracts. “Consideration will always be made to ensure business continuity and certainty. ” Stakeholders have broadly welcomed the principle of de-dollarisation, but urged the RBZ to refine the timeline and implementation details. “The current stability was also acknowledged and commended by key economic agents during stakeholder consultative meetings held from July 7 to 14, 2025, in preparation for the 2025 Mid-Term Monetary Policy Statement.
The stakeholders emphasised the need for the Reserve Bank to remain consistent in the implementation of prudent monetary policy and stay the course — “walking the talk” — by consolidating and entrenching stability,” Dr Mushayavanhu said.
Once lauded as a stabilisation tool, the multi-currency regime, introduced in 2009 to tame hyperinflation, has since become a limiting factor to long-term planning, since it’s been legally provided for until 2030.
US dollar-based contracts remain limited to 2030, while foreign-currency depositors are worried about the fate of their savings once the multi-currency system expires. “Stakeholders relayed concerns about their foreign-currency deposits at the end of the multi-currency system in 2030,” Dr Mushayavanhu said in the 2025 Mid-Term Review, sparking demands for legally binding guarantees.
Speaking at the post-2025 mid-term monetary policy statement review breakfast meeting, RBZ Deputy Governor Dr Innocent Matshe reiterated plans ahead of the 2030 deadline. “This economy is affected by low liquidity, especially in US dollars, which we cannot control at all,” he said. “De-dollarisation is the best route available to give us full control over our monetary policy and drive economic growth. ” General manager of Buy Zimbabwe, a local consumption advocacy, Mr Alois Burutsa, linked de-dollarisation to a broader thrust in President Mnangagwa’s administration. “Local procurement is a key factor in reducing imports and making it easier to de-dollarise,” he said, noting that streamlined processes have already begun to favour domestic suppliers. – Herald
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