John Mushayavanhu and RBZ slow walk ZiG mono currency future

Zimbabwe is done flirting with currency chaos and is slow-walking a one-currency future, betting stability beats speed every single time.

What the central bank is pushing

• The Reserve Bank of Zimbabwe is doubling down on a single-currency goal for domestic transactions.
• The message is clear: this is staged, deliberate, and absolutely not a flip-the-switch moment.
• The 2025 results are being used as proof that this path is not reckless.

Who delivered the message

• Innocent Matshe spoke in Harare on behalf of John Mushayavanhu.
• The remarks landed at the State of the Economy and 2026 Economic Outlook breakfast meeting.
• The event was organized by Africa Economic Development Strategies, working with Business Times.

Why a local currency is non-negotiable

• Matshe framed a domestic currency as mandatory for competitiveness, not patriotic nostalgia.
• The ZiG is being treated as infrastructure, not a branding exercise.
• Mono-currency happens when conditions allow, not when calendars demand.

Why ZiG is being taken seriously

• ZiG launched on April 5, 2024, backed by gold and foreign currency reserves.
• Tight fiscal behavior and stricter monetary control helped it absorb shocks.
• Inflation cooled, and exchange rate volatility stopped screaming.

Where the exchange rate stands

• ZiG strengthened by about 1.5 percent against the US dollar this year.
• The rate moved to roughly ZiG25.59 from ZiG25.98 per dollar.
• The interbank market has been hovering around ZiG26.

The conditions that must be met

• Inflation needs to stay low and predictable.
• Foreign reserves must reach at least 3.6 months of import cover.
• A sustained trade surplus is part of the checklist.

Trade is finally flipping positive

• Zimbabwe is exporting more than it imports.
• Foreign currency inflows jumped hard in 2025.
• Gold prices did most of the heavy lifting.

What policy tools are lining up

• RBZ wants one exchange rate, not a patchwork.
• Taxes and public services are being nudged into local-currency payments.
• Treasury and RBZ are running a back-to-basics coordination play.

Borrowing rules tightening

• Government borrowing is limited to projects that immediately generate revenue.
• No revenue stream, no borrowing.
• This is meant to stop old habits from sneaking back.

Physical cash update

• New ZiG banknotes are scheduled for release around late Q1 or early Q2.
• Durability and security are the selling points.
• Cash is still part of the plan, not an afterthought.

Why the multi-currency door stays open

• Zimbabwe legalized mixed-currency use through December 31, 2030.
• The earlier 2025 cutoff scared lenders.
• Extending the window calmed long-term US dollar lending.

Inflation metrics telling a story

• Annual ZiG inflation dropped to about 15 percent early last year.
• Monthly inflation has averaged roughly 0.4 percent since February 2025.
• Single-digit annual inflation is within reach.

Regional benchmark watch

• The January inflation data is expected next week.
• Matshe hinted it could land inside the SADC 3 to 7 percent range.
• That would be a symbolic milestone.

Foreign currency inflows surging

• Receipts hit US$16.2 billion in 2025.
• That is up from US$13.3 billion the year before.
• Again, gold exports are the star.

Central bank behavior shift

• RBZ reported zero financing of government spending.
• Coordination with the Ministry of Finance made that possible.
• This is a rare flex in Zimbabwe’s recent history.

Reserve position snapshot

• Foreign reserves climbed to US$1.2 billion by December 2025.
• That equals about 1.5 months of import cover.
• Reserves outweigh local money stock by a wide margin.

Money supply discipline

• Local currency money growth fell from 10 percent to about 2 percent in 2025.
• The central bank is signaling no appetite for loosening.
• Low inflation is being guarded aggressively.

Growth outlook check

• Zimbabwe is expected to post around 6.6 percent growth for 2025.
• The 2026 forecast sits at a cautious 5 percent.
• Matshe suggested upside risk if data revisions hit.

Independent economists take

• Gift Mugano says the exchange rate panic has faded since September 2024.
• Parallel market premiums are staying under 20 percent.
• People are no longer sprinting to dump ZiG daily.

Risks still lurking

• Mugano flagged fiscal slippage as the main danger.
• Budget discipline and zero tolerance for quasi-fiscal moves were labeled mandatory.
• Interest rates should stay tight through 2026.

External shocks on the radar

• Oil price spikes tied to geopolitics in the Americas were flagged.
• Climate risks like flooding could disrupt gains.
• Stability planning is being framed as defensive, not reactive.

What could boost lending

• Lower reserve requirements for banks lending to agriculture, manufacturing, and SMEs were floated.
• Growth needs to come from productivity, not demand suppression.
• The aim is stability that people actually feel.

Treasury’s current stance

• Government spending is being squeezed.
• Luxury vehicles, foreign travel, and quasi-fiscal activity are being cut back.
• The idea is boring discipline over dramatic fixes.