HARARE — Zimbabwe has met six of the eight conditions required to transition to the exclusive use of the Zimbabwe Gold (ZiG) currency for domestic transactions...
HARARE — Zimbabwe has met six of the eight conditions required to transition to the exclusive use of the Zimbabwe Gold (ZiG) currency for domestic transactions, leaving only two key milestones before the country can move towards a mono-currency system, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mushayavanhu has said.
In an interview with The Sunday Mail, Dr Mushayavanhu said the transition would not be driven by a fixed date but by the achievement of economic conditions designed to ensure long-term macroeconomic stability.
“The transition to the exclusive use of ZiG for settling all domestic transactions will be a gradual process anchored on macroeconomic stability. As such, the transition is not date-based but is dependent on the achievement of the conditions precedent,” he said.
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The Reserve Bank has identified eight conditions that must be satisfied before Zimbabwe can end the multicurrency system for domestic transactions. These include sustained single-digit inflation, adequate foreign currency reserves, exchange rate stability, an efficient foreign exchange management system, increased demand for the local currency, financial sector stability, an efficient National Payments System, and strong fiscal and monetary policy coordination without central bank financing of government budget deficits.
According to Dr Mushayavanhu, Zimbabwe has already achieved six of those requirements. The country has maintained single-digit inflation since January 2026, while authorities say the foreign exchange market has remained relatively stable and the parallel market premium has been contained below 20 percent.
The RBZ also says it has maintained financial sector stability, strengthened the National Payments System and continued its policy of not financing government budget deficits since April 2024.
“The country is on course to meet the conditions precedent. Important to note is that the country has already achieved most of the conditions and has made significant progress towards achieving the remaining ones,” Dr Mushayavanhu said.
The remaining conditions focus on increasing foreign currency reserves and strengthening demand for ZiG across the economy. Zimbabwe’s foreign currency reserves stood at US$1.6 billion at the end of June, equivalent to approximately 1.6 months of import cover. International benchmarks generally recommend reserves sufficient to finance between three and six months of imports.
Gold has become a key component of the Reserve Bank’s strategy to strengthen the country’s reserves. The RBZ says its gold holdings have increased from 1.5 tonnes when ZiG was introduced in April 2024 to 4.5 tonnes as of last month, accounting for around 40 percent of the country’s total reserves.
The central bank expects its gold holdings to exceed 11 tonnes before Zimbabwe is ready to adopt ZiG as the sole domestic currency.
“The accumulation of gold to levels of around 11 tonnes alongside other foreign currency reserves will put the country on firm footing to maintain macroeconomic stability,” Dr Mushayavanhu said.
He said stronger reserves would allow the central bank to intervene when necessary to reduce excessive exchange rate volatility while improving investor confidence and supporting market stability.
The Reserve Bank is also finalising an automated foreign currency trading system in partnership with the World Bank to improve transparency and efficiency in the foreign exchange market.
Authorities are simultaneously working to increase the use of ZiG by expanding payments for public sector goods and services in the local currency. The RBZ says recent public awareness campaigns have improved confidence in ZiG, with more businesses now accepting payments in both ZiG and United States dollars.
“There has also been a shift in the way the local currency is perceived in the market, as most companies are no longer charging discriminatory prices at more depreciated exchange rates,” Dr Mushayavanhu said.
He added that exchange rates used by supermarkets have increasingly aligned with the official interbank rate, with remaining differences mainly reflecting transaction costs rather than exchange rate uncertainty.
Demand for ZiG has also been supported by government measures requiring 50 percent of quarterly tax obligations to be paid in the local currency, as well as payments to cotton farmers and suppliers providing goods and services to the public sector.
The use of ZiG in electronic transactions has continued to increase. According to the Reserve Bank, electronic payments conducted in ZiG have risen from about 26 percent of all transactions when the currency was introduced in April 2024 to between 35 percent and 40 percent currently.
To strengthen public confidence further, the RBZ recently introduced a new family of high-security ZiG banknotes in denominations of ZiG10, ZiG20, ZiG50, ZiG100 and ZiG200. The ZiG10, ZiG20 and ZiG50 notes are already in circulation, while the ZiG100 and ZiG200 denominations are expected to be released soon.
The Reserve Bank has also joined the World Bank’s Reserve Advisory and Management Partnership (RAMP) programme, which is expected to improve reserve management and strengthen Zimbabwe’s ability to respond to external economic shocks.
Although no timeline has been announced for adopting ZiG as the country’s sole domestic currency, the Reserve Bank says Zimbabwe continues to make progress towards meeting the remaining conditions required for the transition.
