Zimbabwe’s plan to make the Zimbabwe Gold, known as ZiG, the country’s only currency will not be activated on a fixed date, Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu has said.
Instead, the move away from the United States dollar will depend on whether the economy can sustain low inflation, maintain an orderly foreign-exchange market and build enough reserves to protect businesses and essential imports. The governor’s statement places economic conditions, rather than a political timetable, at the centre of one of Zimbabwe’s most important monetary decisions in years.
Speaking on Monday at the launch of Ecobank’s new headquarters in Harare, an event officiated by President Emmerson Mnangagwa, Dr Mushayavanhu said the return to a mono-currency system would be market-led. His comments ended speculation that the government could impose a predetermined deadline for ending the use of foreign currencies in domestic transactions.
“Let me reiterate that the transition to mono-currency, which has been talked about, is going to be market-led. It is no longer dead rest but contingent upon meeting conditions precedent outlined in the National Development Strategy 2,” he said.
The National Development Strategy 2, or NDS2, sets out Zimbabwe’s economic priorities and identifies durable macro-economic stability, stronger foreign-currency reserves and an efficient foreign-exchange system as key conditions for the transition.
The change in policy has immediate implications for banks, companies and borrowers. Dr Mushayavanhu said financial institutions should not restrict loans to maturities ending in 2027 on the assumption that a new currency regime would be in place by then.
“Banking institutions should not limit lending tenures to 2027 because the transition to mono-currency is no longer date-based, but is based on the conditions presented,” he said.
The clarification removes the expectation that loans extending beyond 2027 will automatically be caught up in an imminent change from the current multi-currency arrangement. It also gives banks more room to offer longer-term credit to businesses and individuals while the monetary authorities continue to measure the strength of the economy.
Zimbabwe has made progress on several of the conditions identified by the central bank. Local-currency inflation has fallen into single digits, while the ZiG-to-US-dollar exchange rate has remained broadly stable. The Reserve Bank’s latest monetary figures show annual ZiG inflation at 4.72 per cent at the end of the second quarter of 2026, with monthly inflation averaging 0.47 per cent between January and June.
The central bank has also reported that the exchange rate remained between ZiG25 and ZiG27 to the US dollar during the second quarter. The premium on the parallel market fell below 20 per cent, while ZiG accounted for about 40 per cent of transactions processed through the national payments system.
Those figures represent a marked change from the instability that has accompanied earlier attempts to establish a durable domestic currency. The RBZ’s 2026 monetary policy statement recorded annual ZiG inflation of 4.1 per cent in January, the first single-digit local-currency inflation rate achieved in more than three decades. Authorities expect annual inflation to remain in single digits and monthly inflation to stay below one per cent.
Foreign-currency reserves, however, remain the main barrier to a full transition. Dr Mushayavanhu said Zimbabwe currently had about 1.7 to 1.8 months of import cover. Import cover measures how long a country’s reserves can pay for imports if new foreign-currency income is disrupted.
“We are sitting at about 1,7 to 1,8 months of import cover, we still have a way to go, but we will get there,” he said.
The Reserve Bank’s medium- to long-term target is between three and six months of import cover. Reserves stood at US$1.6 billion at the end of June, equivalent to 1.6 months of imports, before rising to about US$1.7 billion and 1.7 months by the end of July. The authorities are now targeting two months of import cover by the end of 2026, but that would still leave Zimbabwe below the lower end of the NDS2 benchmark.
The reserve build-up has been supported by stronger foreign-currency receipts. Receipts reached US$10.72 billion in the first half of 2026, a 47.8 per cent increase from the same period a year earlier. Export earnings made up the largest share, with gold, tobacco, platinum-group metals and lithium contributing to the improvement. Diaspora remittances also remained an important source of foreign currency.
The total value of foreign-currency receipts is different from the stock of reserves held by the central bank. Money entering the economy through exports, remittances and loans may be used to pay for imports, settle private-sector obligations or support investment. Only the portion retained as reserves is available to provide a buffer during an external shock.
The current account is expected to remain in surplus at about US$2.5 billion this year, supported largely by merchandise exports and money sent home by Zimbabweans living abroad. In the second quarter alone, the current-account surplus was estimated at about US$570 million, compared with US$270.7 million in the same period the previous year.
The government’s challenge is to convert those inflows into a reserve cushion without starving productive companies of the foreign currency they need to buy equipment, raw materials and fuel. A stronger reserve position would give the central bank more capacity to manage sudden demand for foreign currency and defend the stability of the ZiG.
The country’s previous experience is shaping the cautious approach. Zimbabwe adopted a multi-currency system in 2009 after hyperinflation destroyed the value of the local dollar. Ten years later, in June 2019, the government banned the use of foreign currencies for domestic transactions and made the Zimbabwe dollar the sole legal tender.
That decision was taken after the interim RTGS dollar had already come under pressure from black-market speculation. The change created difficulties for businesses with debts priced in US dollars and contributed to a period of foreign-currency shortages. Companies struggled to obtain the hard currency needed to settle obligations and pay for imports, while the gap between formal and parallel-market exchange rates put further pressure on prices.
The authorities later estimated that unpaid foreign-currency obligations from that period had created blocked funds and legacy debt of about US$3.3 billion. The experience reinforced the importance of having adequate reserves and a functioning foreign-exchange market before attempting another fundamental currency change.
ZiG was introduced in April 2024 as part of a fresh attempt to stabilise the exchange rate and control inflation. The currency is supported by foreign-currency reserves and gold, while the Reserve Bank has sought to control money supply and improve the way foreign exchange is traded. The central bank has also said it plans to introduce a digital foreign-exchange trading system to improve price discovery and make the market more transparent.
Dr Mushayavanhu said the country had already made progress in creating the foreign-exchange system required for the transition.
“I think that one, we are already there, Your Excellency,” he said.
The system is intended to reduce market segmentation and improve access to foreign currency for legitimate transactions. It is also designed to limit the distortions that arise when official and parallel exchange rates diverge sharply.
The International Monetary Fund has recorded improved macro-economic stability following the tightening of monetary policy. Economic activity recovered during the first half of 2025, although fiscal financing pressures increased as spending rose and external financing weakened. The central bank has kept monetary conditions tight and said it will avoid easing policy too quickly in case renewed inflation reverses the gains made so far.
For Zimbabwe, the monetary test has therefore moved beyond simply reducing inflation. The government must now keep prices stable while accumulating reserves, maintaining confidence in the ZiG and ensuring that banks and businesses can obtain foreign currency for normal commercial activity.
Dr Mushayavanhu’s position is that the US dollar will not be removed because a date has arrived on the calendar. It will be removed when Zimbabwe has built the economic foundations needed for the ZiG to carry the full weight of domestic trade. Until the reserve position reaches the required level and stability is sustained, the multi-currency system will remain in place.
The transition will be judged by the strength of the economy, the durability of price stability and the country’s ability to withstand another period of pressure without returning to foreign-currency shortages. For now, Zimbabwe has made progress on inflation and exchange-rate management, but the distance between 1.7 months of import cover and the minimum three-month target remains the clearest measure of the work still to be done.