HARARE – Zimbabwe’s central bank has outlined a gradual roadmap to reduce the dominance of the United States dollar in domestic transactions, signalling a long-term shift toward a mono-currency system anchored on the Zimbabwe Gold (ZiG).
Speaking at the Zimbabwe Impact Investment Dialogue—hosted by the United Nations Development Programme and the Zimbabwe Investment and Development Agency—Reserve Bank Deputy Governor Innocent Matshe said authorities are working toward restoring monetary sovereignty, albeit through a cautious and phased approach.
“Not soon, but one day,” Matshe told delegates, underscoring that the transition away from dollarisation would be gradual and contingent on sustained macroeconomic stability. He noted that the ZiG has shown modest appreciation of approximately 2.5% over the past three months, which authorities view as an early signal of currency stabilisation.
Under the proposed framework, Zimbabwe would retain foreign currency accounts, allowing businesses and individuals to hold and transact in foreign exchange where necessary. However, the use of physical US dollar cash in routine domestic transactions—such as retail purchases—would eventually be phased out.
“What will happen is you won’t be able to go to the supermarket and use your US dollars,” Matshe said, while emphasising that there would be no forced conversion of foreign currency holdings.
The central bank also sought to reassure investors and lenders, noting that foreign-denominated obligations—including registered external loans—would continue to be serviced in their original currencies. Importers, meanwhile, would retain access to foreign exchange through formal banking channels, a critical factor in maintaining trade flows and supply chain stability.
Zimbabwe’s reliance on the US dollar for over a decade has been driven by repeated episodes of currency instability and inflation, which eroded confidence in local monetary systems. Authorities now view de-dollarisation as essential to regaining control over monetary policy, improving liquidity management, and strengthening the transmission of economic policy tools.
“No country can sustainably develop using another country’s currency,” Matshe said, while acknowledging that rebuilding trust in the local unit remains the central challenge.
From a policy perspective, the shift toward a ZiG-based system represents more than a currency change—it is an attempt to re-establish the core functions of money: unit of account, store of value, and medium of exchange. However, economists caution that success will depend on strict policy discipline, including exchange rate alignment, fiscal restraint, and credible reserve backing.
Market participants remain cautious, noting that previous currency transitions were undermined by policy inconsistency and liquidity imbalances. For the ZiG to gain traction, authorities will need to ensure stable pricing, adequate foreign currency availability for critical sectors, and a transparent monetary framework.
If successfully executed, the transition could mark a turning point in Zimbabwe’s monetary policy architecture, enabling greater control over domestic liquidity and reducing vulnerability to external shocks. However, failure to sustain credibility risks reinforcing dollarisation rather than reversing it.
For now, the message from policymakers is clear: de-dollarisation is not imminent—but it is firmly on the long-term policy horizon.
