Sunday Mail Reporter
CURRENT market conditions — which are characterised by low and stable inflation, a stable exchange rate, continued increase in foreign currency reserves and stability in the banking sector — create fertile conditions for the gradual and phased transition to the sole use of the local currency within the next five years, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mushayavanhu has said.
For Zimbabwe, which adopted a multi-currency system in 2009 following the collapse of the Zimbabwe dollar, the move is crucial to restoring monetary sovereignty, improving control over domestic monetary policy and ensuring that the benefits of economic growth directly strengthen the local economy.
Dr Mushayavanhu told The Sunday Mail that the country’s ongoing efforts were guided by a carefully phased road map that aims to achieve full mono-currency status — or sole use of the local currency — by 2030.
He said the process is deliberately cautious to preserve macroeconomic stability and ensure that the right economic conditions are in place before the transition is completed.
“Zimbabwe introduced a new currency in April 2024 and is currently in its adjustment phase on the road to full mono-currency by 2030,” said Dr Mushayavanhu.
“The transition process to mono-currency requires a cautious and gradual approach in the implementation of appropriate monetary and fiscal policies to create the desired conditions precedent . . . When the desired fundamentals are in place, the road to mono-currency will be market-driven.”
The central bank said the obtaining stability is demonstrated by the better-than-expected inflation outlook and significant convergence between the parallel exchange rate and general prices.
The factors that reportedly smoothen the transition to a mono-currency include stable and low inflation, which has averaged 0,5 percent per month this year; a stable exchange rate within the regional convergence target of plus or minus 10 percent; as well as increased foreign currency reserves from 0,4 months of imports to 1,2 months at the end of last month.
The ideal conditions that support a mono-currency include durable macroeconomic stability, adequate foreign currency reserves covering at least three months of imports, stable exchange rate dynamics, banking sector stability, fiscal sustainability (limited recourse to central bank financing) and the need for sustained creation of demand for use of the local currency.
Dr Mushayavanhu said it is “critical to promote durable ZiG (Zimbabwe Gold) stability”.
“The Reserve Bank has been deliberately accumulating foreign currency reserves to support the long-term stability of the economy,” he said.
“As a result, gross foreign reserves have risen steadily to over US$900 million, representing about 1,1 months of import cover on the back of record tobacco, gold output and other mineral exports. The current foreign currency reserves accumulation strategy, which is also a gradual process, will result in adequate build-up of foreign currency reserves to target levels of three to six months in the short to medium term, critical to promote durable ZiG stability.”
He said banking sector stability has also been maintained, with non-performing loans at 2,9 percent, well below the international benchmark of 5 percent.
To boost public confidence in ZiG, he said, the central bank has prioritised transparency, effective communication and consistent policy implementation.
“The Reserve Bank recognises that confidence-building is not an event but takes time and is being addressed through consistent policy communication, improved liquidity management and increased use of ZiG in Government transactions,” he said.
“The Reserve Bank is also reviewing transaction costs and payment infrastructure to enhance the attractiveness of local currency usage.”
Dr Mushayavanhu said results from the RBZ’s latest “ZiG Perception and Confidence Survey II” show a marked rise in public acceptance of the currency from 40 percent in June 2024 to over 90 percent by September 2025.
ZiG transactions on the National Payment System have also increased from 26 percent in April 2024 to a peak of 43 percent in May 2025.
Monetary authorities say they will remain watchful and proactive in responding to any emerging risks that may potentially destabilise the economy.
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