RBZ says GOODBYE to the US Dollar, gives update on using the ZiG as Zimbabwe’s ONLY currency
HARARE – The Reserve Bank of Zimbabwe (RBZ) has signalled a decisive move away from the multi-currency system that has dominated the nation’s economy for years, declaring that the country’s shift towards a single, local currency is not only on track but “progressing well.” This comes as the central bank provides a comprehensive update on its plans to establish the Zimbabwe Gold (ZiG) as the nation’s sole legal tender, effectively saying goodbye to the era of the US dollar’s dominance.
In a statement that lays out a clear vision for the nation’s monetary future, the RBZ has confirmed that the foundational economic pillars required to support such a significant transition are steadily falling into place. The announcement follows a period of remarkable stability for the ZiG, a currency introduced in April 2024, which has now successfully navigated more than a year of market pressures while maintaining a stable exchange rate.
Zimbabwe has been operating under a multi-currency regime, a system born out of necessity following years of hyperinflation that rendered the previous local currency worthless. While this system brought a measure of stability, it also led to the widespread use and dominance of the United States dollar, creating a complex and often challenging economic environment. However, the winds of change are now blowing, with market indicators and official pronouncements pointing towards an accelerated transition to a mono-currency system, a move that authorities believe will restore full monetary sovereignty to the nation.
The central bank’s confidence is not without basis. In a recent quarterly economic update, the RBZ detailed the positive strides made throughout 2025, a year that has been pivotal in laying the groundwork for this ambitious currency reform. The bank highlighted a series of improving conditions that are creating a fertile environment for a future mono-currency regime.
“RBZ notes improving conditions for a future mono-currency regime, including macroeconomic stability, reserve accumulation, stable exchange rates, increased ZWG usage, payment system efficiency, and strong fiscal-monetary policy coordination,” the central bank stated.
These are not mere buzzwords but represent tangible progress in key economic areas. The 2025 monetary policy has been credited with restoring discipline and delivering measurable gains in the fight against inflation, a battle that has long been a thorn in the side of Zimbabwe’s economy. The results speak for themselves: annual inflation plummeted to 15% by the end of 2025, a figure well below the 30% target. Furthermore, month-on-month inflation has been kept in check, averaging a mere 0.4% from February to December 2025, a clear indicator of price stability.
One of the most visible signs of this newfound stability has been the performance of the ZiG on the foreign exchange market. The interbank exchange rate has remained remarkably stable, hovering around ZWG 26 to the US dollar. This stability has also had a significant impact on the parallel market, a traditional source of currency volatility. The parallel market premium, which has often been a major headache for both consumers and businesses, was successfully contained below 20% for the majority of 2025, a significant improvement from previous years where it often exceeded 40%.
Underpinning the entire strategy is the accumulation of foreign currency reserves, a crucial buffer for any country seeking to maintain a stable currency. The central bank reported that foreign currency reserves have reached approximately US$1.2 billion, which is equivalent to 1.5 months of import cover. This provides a solid backing for the ZiG, with the reserve money being backed nearly six times over by foreign currency. The country’s foreign currency receipts have also been robust, reaching an impressive US$16.2 billion in 2025.
Looking ahead, the RBZ has unveiled a five-year strategic plan for the period 2026-2030, which serves as a detailed roadmap for the transition to a mono-currency system. At the heart of this plan is the consolidation of price, currency, and exchange rate stability. The target is clear: to achieve a mono-currency system by 2030, with the ZiG as the anchor.
RBZ Governor, Dr. John Mushayavanhu, has been a vocal proponent of this strategy, emphasizing the need for a disciplined and market-driven approach. In an executive summary of the five-year plan, he stressed that the central bank would “stay the course” in its pursuit of stability, making it clear that policy credibility is non-negotiable.
“The Reserve Bank will work on the timely achievement of the conditions precedent for a smooth transition to mono-currency,” Dr. Mushayavanhu said, highlighting that sustained low inflation, adequate reserve buffers, sound financial systems, and a strong alignment between fiscal and monetary authorities are the critical building blocks for this transition.
He also acknowledged the success of the tight monetary policy in taming inflation, while signalling a shift towards a more prudent approach in the future. “A tight monetary policy served the country well in taming inflation,” he said. “Going forward, our focus will be disciplined money supply management that responds to emerging risks without undermining hard-won stability.”
To further bolster public confidence and increase the circulation of the local currency, the RBZ has confirmed that new ZiG banknotes are ready for release and will be rolled out in a phased manner during the first quarter of 2026. The introduction of these new notes will be a gradual process, carefully aligned with economic conditions and the genuine demand for physical cash.
Crucially, Dr. Mushayavanhu has assured the public that the release of these new banknotes will not lead to an increase in the money supply. “This will not expand money supply because banks will obtain the cash by exchanging it for their RTGS balances at the Reserve Bank,” he explained.
The news of the impending currency reforms and the introduction of new banknotes has been met with a mix of cautious optimism and relief from the public and business community. For many, the return to a single, stable local currency represents a return to normalcy and a simplification of daily economic life.
Tendai Moyo, a commuter omnibus operator in Harare, welcomed the move, highlighting the practical challenges of the multi-currency system. “Having cash will make day-to-day transactions easier, especially for transport and informal trading where electronic payments are sometimes unreliable,” he said.
His sentiments were echoed by Rudo Chikomo, a small-scale trader, who believes the availability of physical cash will improve business efficiency in the informal sector. “Cash will help us to serve customers faster and avoid delays caused by network challenges,” she said.
Economic analysts and banking professionals have also broadly welcomed the RBZ’s strategic plan, describing it as a structured, transparent, and market-oriented roadmap that has the potential to anchor currency stability and restore long-term confidence.
Economic analyst Mr. Malone Gwadu praised the plan for its clear sequencing of reforms. “I think this is a robust strategic plan, clearly articulating the intended outcomes, especially around currency management as well as the institutional restructuring of the bank,” he said. He also noted that the transfer of quasi-fiscal operations to the Treasury has “de-stressed the RBZ balance sheet and re-oriented it towards supporting the preset five-year strategy.”
Economist Ms. Victoria Ncube emphasized the importance of the central bank’s restructuring in restoring policy effectiveness. “For years, monetary policy transmission was weakened by quasi-fiscal activities and balance sheet constraints,” she said. “Completing the restructuring creates policy space and strengthens the Bank’s independence, which is essential if markets are to trust future signals.”
From a banking perspective, Mr. Raymond Madziwa highlighted the importance of a predictable economic environment for businesses and investors. “Banks and businesses plan better in a predictable environment,” he said. “The RBZ’s clear stance on moderating volatility and accumulating reserves sends a signal that currency stability is not a short-term objective, but a sustained policy goal.”
The road to a mono-currency system is not without its challenges, and the success of this ambitious reform will ultimately depend on a number of factors. Policy consistency, fiscal restraint, and the RBZ’s ability to maintain its credibility in an increasingly complex global environment will be crucial. However, the detailed roadmap, the positive economic indicators, and the growing public and expert confidence suggest that Zimbabwe is on a firm path towards reclaiming its monetary sovereignty and ushering in a new era of economic stability with the ZiG at its core.
My Zimbabwe
