The Reserve Bank of Zimbabwe (RBZ) says reserves backing the Zimbabwe Gold (ZiG) currency have risen by nearly 9% to US$980 million, as the central bank moves to create the buffer required for a future monocurrency regime.
Reserves stood at US$900 million in September, with approximately ZiG18 billion currently circulating in the formal economy. According to RBZ officials, the central bank will be in a position to transition to a monocurrency regime once foreign currency reserves reach around US$6 billion, aligning with government plans to adopt a single currency by 2030.
Speaking at the annual Banks and Banking Survey and Awards 2025, organized by the Zimbabwe Independent, RBZ’s director of Economic Research, Modelling & Policy, Nebson Mupunga, said the bank is working closely with fiscal authorities to ensure policy cohesion.
“There’s a need for continued fiscal and monetary policy cohesion with limited monetisation or fiscal deficits. We hope to maintain that cohesion, then we will be able to gradually transition to monocurrency in a market-friendly manner,” Mupunga said.
He described the current trajectory as “positive,” noting that foreign reserves are approaching US$1 billion, equivalent to around 1.2 months of import cover. Mupunga added that the RBZ aims to gradually increase reserves to about US$6 billion, covering six months of imports, before fully transitioning to a monocurrency.
Mupunga also highlighted the importance of stable exchange rate dynamics and increased demand for the ZiG as prerequisites for the transition. “If the exchange rate is stable with limited over- or undervaluation, economic agents will be indifferent between holding US dollars and the local currency,” he said.
However, economists have raised concerns over the practicality of these plans. Gift Mugano, an economist, noted that the reported 15% circulation of ZiG pertains only to the formal sector, which accounts for 23.9% of the economy, while the informal sector—which makes up 76.1%—does not actively use the currency.
“The Reserve Bank has a tight monetary policy; they are reining in ZiG circulation. In terms of money supply, it is below 2% when you consider the entire economy,” Mugano said, warning that without informal sector adoption, demand for ZiG may remain limited.
The RBZ’s report comes amid broader efforts to stabilise the economy, strengthen confidence in local currency, and lay the groundwork for a future monocurrency system.
Source – Newsday
