The RBZ report paints a picture of significant short-term tactical success in stabilizing inflation and the exchange rate through prudent monetary control. However, the key problems are structural and confidence-related:
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Fragile trust in the new currency due to a history of monetary failures.
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Persistent dollarization, meaning the ZiG is not yet truly the dominant currency.
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Insufficient forex reserves to withstand external shocks.
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Underlying fiscal risk, as monetary stability cannot last without permanent fiscal discipline.
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An economy still vulnerable to swings in a narrow range of commodity exports.
The path to a sustainable “mono-currency” requires not just maintaining current policies but deep structural reforms, building a much larger war chest of reserves, and fostering genuine demand for the ZiG—a process that will take years of consistent performance to overcome decades of economic trauma.
The Reserve Bank of Zimbabwe’s own “Quarterly Snapshot,” several key underlying problems and vulnerabilities persist in the Zimbabwean economy, despite the significant progress highlighted. Here is a critical analysis:
1. Hyperinflation Legacy & Fragile Confidence
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Problem: The report itself shows annual ZiG inflation peaked at 95.8% in July 2025. While it has fallen to 15%, this is a very recent disinflation from hyperinflationary levels.
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Risk:Â Inflation expectations are likely still unanchored. The memory of hyperinflation and currency collapses (like the Zimbabwe dollar) makes the public and businesses inherently distrustful of the new currency (ZiG). Sustaining single-digit inflation is critical but not yet achieved.
2. Dollarization & Lack of ZiG Demand
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Problem: The share of ZiG loans to total loans was only 15.55% in December 2025. This indicates that over 84% of formal lending is still in US dollars, showing a profound lack of confidence in the local currency for long-term contracts.
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Risk:Â The economy remains heavily dollarized. For the ZiG to become a true mono-currency, it must be demanded for savings, investment, and lending. The current data shows this transition is far from complete.
3. Inadequate Foreign Reserve Buffer
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Problem: Total foreign reserves are reported at US$1.209 billion, covering just 1.5 months of imports. The stated target for a mono-currency is 3-6 months of import cover.
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Risk:Â This level of reserves is thin. Any external shock (e.g., a drop in mineral prices, a drought affecting agriculture) could rapidly deplete reserves, forcing a devaluation of the ZiG and shattering the hard-won stability.
4. Persistent Parallel Market & Unmet Demand
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Problem:Â The existence of “Uncovered Foreign Currency Demand” (which spiked to US$29.74 million in Dec 2025) and a parallel market premium shows the official “Willing-Buyer Willing-Seller” market is not fully clearing demand.
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Risk:Â This segmentation creates opportunities for arbitrage, distorts prices, and indicates that businesses still face challenges accessing forex through official channels, which can hamper production and fuel the informal market.
5. Fiscal Policy Risk (The Unmentioned Elephant)
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Problem: The report proudly states “Zero central bank financing of Government expenditure.” However, this is a recent achievement. The history of fiscal dominance—where the government’s deficit spending forces the central bank to print money—is the root cause of Zimbabwe’s past hyperinflation.
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Risk:Â The sustainability of monetary stability is entirely dependent on continued fiscal discipline. Any return to deficit financing by the central bank would instantly destroy confidence in the ZiG.
6. Structural Economic Vulnerabilities
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Problem:Â Foreign currency receipts are heavily dependent on a narrow base (59.7% from exports, dominated by minerals). This makes the entire stability program highly susceptible to commodity price cycles on global markets.
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Risk:Â A downturn in prices for gold, platinum, or other key minerals would directly reduce forex inflows, squeeze reserves, and put pressure on the exchange rate and inflation.
7. The “Implied Exchange Rate” Discrepancy
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Problem: The report shows two key rates: the official WBWS rate (ZiG 25.98/US$) and the Implied Exchange Rate (ZiG 15.15/US$). The implied rate is the ratio of ZiG deposits to forex reserves, suggesting what the rate should be if fully backed.
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Risk: This large gap (ZiG 15.15 vs. 25.98) indicates that the market rate is significantly weaker than what the reserve backing implies. It can be interpreted as a market premium for risk and lack of full confidence, signaling that the ZiG may still be overvalued in the official market.
“Monetary policy during 2025 demonstrated clear effectiveness, restored discipline, and measurable macroeconomic gains, particularly in inflation control and exchange rate stability. Sustaining this trajectory in 2026 will require continuing to walk the talk in prudent money supply management, foreign currency reserve accumulation and strong fiscal and monetary policy complementarity”.- Dr. J. Mushayavanhu
MAJOR HIGHLIGHTS & ACHIEVEMENTS IN 2025
This Quarterly Snapshot outlines major highlights of monetary and financial conditions for the fourth quarter (Q4) of 2025. Reflecting the Reserve Bank’s commitment to transparency, it serves as a vital resource for providing the public with regular updates and high-frequency indicators that support its monetary policy stance. The current price and exchange rate stability being experienced in the economy demonstrates the effectiveness of prudent monetary policy anchored on optimal money supply management, greater exchange rate flexibility based on the Willing-Buyer Willing-Seller arrangement, consistent accumulation of foreign reserves backing ZiG as well as enhanced monetary and fiscal policy coordination. The sustained macroeconomic stability has resulted in the monetary policy regaining trust, confidence and credibility marking a decisive break from the past. Notable achievements realised in 2025 include the following:
- Sustained disinflation of ZiG annual inflation ending 2025 at 15% against a target of 30%.
- Stability in month-on-month inflation averaging 0.4% from February to December 2025.
- Exchange rate stability, with the interbank exchange rate oscillating around ZiG26 per US dollar, with the parallel market premium contained below 20% for the greater part of 2025.
- Reserve money growth kept under check amounting to ZiG5.3 billion as at end December 2025.
- Zero central bank financing of Government expenditure.
- Sustained increase in foreign currency receipts amounting to US$ 16.2 billion in 2025 up from US$ 13.3 billion in 2024.
- Consistent accumulation of foreign currency reserves reaching US$ 1.2 billion representing 1.5 months of import cover as at 31 December 2025.
- Foreign currency reserves backing the local currency, equivalent to around 6 times cover of ZiG reserve money and almost double the total ZiG deposits.
- Increased use of the ZiG in the economy to around 30-40% of total national payment system transactions with currency in circulation increasing to ZiG 510 million, representing 3% of broad money.
- Continued soundness, resilience and stability in the financial sector and the national payment system.
KEY MACROECONOMIC AND FINANCIAL INDICATORS
| Indicator | Value/Rate |
|---|---|
| Bank Policy Rate | 35% |
| Minimum Time Deposit Rate (90-Day) | ZiG = 7.5% US$ = 4% |
| Minimum Savings Deposit Rate | ZiG = 5% US$ = 2.5% |
| Interbank Exchange Rate (ZiG/US $ End-period December 2025) | 25.9807 |
| ZiG Inflation December 2025 | 15% |
| Month-on-Month Growth in ZiG Deposits (Dec 2025) | 3.1% |
| ZiG Currency in Circulation | 3% of ZiG Bank Deposits |
| RBZ Total Intervention (FX supply) since April 2024 | US$1.34 Billion |
| Foreign Currency ZiG Reserve Money Cover | 5.88 times |
| Total Reserves Covering ZiG | US$ 1.2 Billion |
| Import Cover Equivalent | 1.5 Months |
| Total Foreign Currency Receipts (2025) | US$16.2 billion |
| Trade Balance – October 2025 (US$ million) | 28.7 |
| Trade Balance – November 2025 (US$ million) | 90.4 |
| Current Account Surplus 2025 (proj.) | over US$ 1 Billion |
| Lending to Government | Nil |
CONDITIONS PRECEDENT FOR MONO-CURRENCY
National Development Strategy (NDS) 2 outlines the following conditions precedent to foster a sustainable transition to a mono-currency system:
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- Durable macro-economic stability, characterised by low and stable inflation at single-digit levels.
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- Adequate foreign currency reserves of at least 3-6 months of import cover, in the medium to long-term.
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- Efficient foreign exchange management system that eliminates foreign exchange market segmentation and promotes ease of access to foreign currency by importers and for other bona fide requirements.
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- Stable exchange rate dynamics, with minimum over or under valuation of the ZiG.
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- Increased demand for ZiG through recalibration of the percentage of Government taxes and broadening of public sector goods and services in local currency.
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- Financial sector stability.
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- Efficient and secure National Payments System, to promote ease of payment in ZiG locally.
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- Fiscal and monetary policy cohesion, with low and sustainable National Budget deficits.
The above achievements have gone a long way in satisfying the Conditions Precedents for the road map to mono-currency as enunciated in the National Development Strategy 2 (NDS 2) which prioritises Macro-economic Stability and Financial Sector Deepening as a key pillar for the realization of Vision 2030.
This Quarterly Snapshot report, therefore, represents the RBZ’s official communication on monetary policy management and its impact on inflation and output.
The data included in this Quarterly Snapshot is sourced from Official data providers, the Reserve Bank of Zimbabwe for monetary and financial statistics and the Zimbabwe National Statistics Agency (ZIMSTAT) for inflation and international trade statistics. Note Bene: some data for the respective quarter may be provisional and subject to minor revisions.
In this regard, under NDS 2 the Reserve Bank will remain steadfast in ensuring durable and lasting macro-economic stability through the calibration of its monetary policy stance to achieve low and stable inflation, maintenance of positive real interest rates, growing national savings, accumulating foreign reserves and the deepening and broadening of Zimbabwe’s financial markets.
KEY MACROECONOMIC AND FINANCIAL INDICATORS (DETAILED TABLE)
| Â | Apr-24 | Sep-24 | Dec-24 | Mar-25 | June-25 | July-25 | Aug-25 | Sep-25 | Oct-25 | Nov-25 | Dec-25 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ZiG Month-on-Month Inflation (%) | — | 5.78 | 3.67 | -0.06 | 0.28 | 1.57 | 0.40 | -0.25 | -0.36 | 0.20 | 0.20 |
| ZiG Annual Inflation (%) | — | — | — | — | 92.5 | 95.8 | 93.8 | 82.7 | 32.7 | 19 | 15 |
| Total ZiG Deposits (million) | 4,098 | 11,788 | 11,958 | 14,593 | 16,387 | 16,377 | 16,696 | 16,763 | 17,539 | 17,723 | 18,310 |
| Non-performing Loans (%) | — | 3.19 | 3.37 | 3.34 | 2.90 | — | — | 3.07 | — | — | na |
| Reserve Money (ZiG million) | 1,239 | 2,248 | 3,516 | 3,785 | 4,658 | 4,564 | 4,590 | 4,732 | 4,931 | 5,218 | 5,337 |
| Reserve Money Cover (ZiG million) | 2,203 | 9,034 | 12,164 | 16,871 | 19,697 | 19,580 | 21,991 | 23,175 | 24,829 | 27,348 | 31,408 |
| Market Position + NNCDs (ZiG million) | 1,597 | 497 | 1,445 | 2,401 | 1,877 | 924 | 2,042 | 1,721 | 2,399 | 2,220 | 3,824 |
| Cash and Nostro (USD million) | 151 | 196 | 192 | 296 | 309 | 301 | 374 | 359 | 410 | 440 | 574 |
| Gold Holdings (Kgs) | 1,500 | 1,948 | 2,626 | 2,779 | 3,439 | 3,449 | 3,449 | 3,577 | 3,594 | 3,982 | 4,030 |
| Gold Holdings Value (USD Million) | 113 | 167 | 220 | 275 | 361 | 366 | 383 | 440 | 462 | 532 | 566 |
| Total Reserve Covering ZiG (USD Million) | 276 | 419 | 472 | 630 | 731 | 731 | 822 | 870 | 941 | 1,044 | 1,209 |
| Uncovered Demand for Foreign Currency | — | 11.68 | 12.27 | 14.84 | 17.52 | 3.64 | 13.79 | 10.22 | 19.02 | 2.53 | 29.74 |
| WBWS Exchange Rate | 13.43 | 24.8831 | 25.7985 | 26.7654 | 26.9457 | 26.7863 | 26.7548 | 26.6439 | 26.3865 | 26.1901 | 25.9807 |
| Implied Exchange Rate | — | 25.5489 | 24.7374 | 22.5598 | 22.6416 | 22.4041 | 20.3127 | 19.2724 | 18.6397 | 16.9731 | 15.1464 |
MONEY SUPPLY (M3) DEVELOPMENTS
| Chart Title | Description |
|---|---|
| ZiG Loans Growth (%) | Chart showing percentage growth from October 2024 to December 2025. |
| Foreign Currency Loans Growth (%) | Chart showing percentage growth from October 2024 to December 2025. |
The month-on-month growth in the local currency component of broad money (M3) fell from above 10% to an average of about 2% in 2025, largely reflecting the Reserve Bank’s prudent monetary policy stance.
The Reserve Bank is committed to keeping money supply growth under check, to ensure durable low and stable inflation in the economy.
The Reserve Bank’s monetary policy stance has supported the stability of both ZiG and US dollar denominated loans growth.
DEVELOPMENTS IN WEEKLY BANK LOANS
Weekly average ZiG loan growth for 2025 was 0.40% while the foreign currency-denominated loans, grew by a weekly average growth of 0.64%.
The share of ZiG loans to total loans stood at 15.55% in December 2025.
ZiG loan-to-deposit ratio increased from below 30% in April 2024 to 38% in December 2025.
FOREIGN CURRENCY RECEIPTS AND PAYMENTS
| Chart Title | Description |
|---|---|
| Foreign Currency Receipts | Chart showing receipts over time. |
| Foreign Currency Payments | Chart showing payments over time. |
The country has continued to receive foreign currency inflows enough to cover its external payment obligations leaving a sizeable surplus.
The surplus averaged around US$400 million in 2025, which has been crucial in supporting domestic transactions.
Foreign currency receipts averaged US$1.3 billion per month in 2025.
The country’s external payments obligations averaged US$951.31 million per month during the same period.
FOREIGN CURRENCY RECEIPTS
| Month | Export Proceeds (US$) | NGOs (US$) | Income Receipts (US$) | Total (US$) |
|---|---|---|---|---|
| Apr 2024 | 1,431 | 1,000 | 1,000 | 2,141 |
| May 2024 | 1,363 | 1,000 | 1,250 | 2,613 |
| Jun 2024 | 1,551 | 1,000 | 1,375 | 3,426 |
| Jul 2024 | 1,418 | 1,000 | 1,375 | 3,413 |
| Aug 2024 | 1,143 | 1,000 | 1,375 | 3,413 |
| Sep 2024 | 1,125 | 1,000 | 1,375 | 3,413 |
| Oct 2024 | 1,175 | 1,000 | 1,375 | 3,413 |
| Nov 2024 | 1,375 | 1,000 | 1,375 | 3,413 |
| Dec 2024 | 1,375 | 1,000 | 1,375 | 3,413 |
The resilience in the country’s foreign currency generation capacity has seen a notable increase of 21.8% to US$ 16.2 billion recorded in 2025 from US$ 13.3 billion in 2024.
Export earnings dominated the basket of foreign currency receipts, averaging 59.7% of total foreign currency receipts in 2025, followed by loan proceeds at 14.8%, and Diaspora Remittances at 13.5%.
A significant growth in foreign currency receipts is expected in 2026 on account of the improvement in prices of key export minerals and the growth in remittances.
EXCHANGE RATE DEVELOPMENTS
| Month | Premium (%) | Interbank Rate (%) | Parallel Rate (%) |
|---|---|---|---|
| Apr 2024 | 45 | 40 | 35 |
| May 2024 | 40 | 35 | 30 |
| Jun 2024 | 35 | 30 | 25 |
| Jul 2024 | 30 | 25 | 20 |
| Aug 2024 | 25 | 20 | 15 |
| Sep 2024 | 20 | 15 | 10 |
| Oct 2024 | 15 | 10 | 5 |
| Nov 2024 | 10 | 5 | 0 |
| Dec 2024 | 5 | 0 | -5 |
The exchange rate remained stable against the US dollar averaging ZiG26.61 and closing the year at ZiG25.98 per dollar.
The parallel market exchange premium was contained at levels below 20% for the greater part of 2025.
Foreign exchange market interventions amounting to $1.34bn since April 2024 have contributed to the smooth functioning of the foreign exchange market under the Willing-Buyer Willing-Seller (WBWS) arrangement.
REAL EFFECTIVE EXCHANGE RATE (REER)
The Real Effective Exchange Rate (REER) remained stable and close to the base averaging around 96 throughout 2025.
The stability in the REER shows that the exchange rate was broadly aligned in 2025.
BROAD-BASED DISINFLATION: A RETURN TO ENDURING STABILITY
ZiG Month-on-month Inflation
| Legend | Description |
|---|---|
| ZiG Headline Inflation | Line on chart from Jan 2024 to Dec 2025 |
| Food Inflation | Line on chart from Jan 2024 to Dec 2025 |
| Non-food Inflation | Line on chart from Jan 2024 to Dec 2025 |
ZiG Annual Inflation
| Legend | Description |
|---|---|
| Disinflation Trajectory | Line on chart from April 2025 to December 2025 |
Month-on-month ZiG inflation averaged around 0.4% since February 2025, reflecting enduring price stability.
Annual ZiG inflation declined from a peak of 95.8% in July 2025 to 15.0% in December 2025 against an end of year target of 30%, with the disinflation path expected to continue to single-digit levels in the first quarter of 2026.
The sustained disinflation is supporting the maintenance of positive real interest rates, which are essential for value preservation, investment growth, and financial stability.
RESERVES AND BACKING
Total Foreign Reserves backing the ZiG as of 31 December 2025: US$ 1.209 Billion
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- Cash and Nostro Balances (USD million): 574
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- Gold Holdings (Value in USD million): 566
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- Other Reserves (in-kind royalties): Value not specified in table for Dec 2025.
Coverage Ratios (as of December 2025):
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- Reserve Money Cover: 5.88 times (Total Reserves / Reserve Money)
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- Import Cover: 1.5 months
ECONOMIC AND INFLATION OUTLOOK
The prevailing macroeconomic stability during 2025 has been critical in supporting the robust growth estimated at 6.6%. In 2026, monetary and financial conditions will be calibrated to underpin the envisaged growth of upwards of 5%. ZiG inflation is projected to remain low and stable, with the disinflationary path expected to continue stabilising and reach single digit in the first quarter of 2026.
The Reserve Bank remains vigilant and responsive, calibrating its monetary policy stance to balance price stability and economic growth imperatives.
The Reserve Bank will continue to pursue a prudent, data-driven monetary policy stance supported by an effective communication through regular updates to foster certainty and predictability.
Overall, the Reserve Bank will aim to maintain macroeconomic stability in the short to medium term critical to achieve the Conditions Precedent for roadmap to mono-currency and attain the NDS 2 targets and objectives toward the realization of Prosperous and Empowered and Upper Middle-Income Society.
Dr. John Mushayavanhu GOVERNOR 11 January 2026
Stable. Secure. Sustainable.
ZiG BUSINESS Delivering on the stability promise where the ZiG works for the people of Zimbabwe, now and into the future.
DEFINITIONS AND EXPLANATORY NOTES
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- Monthly Inflation: Measures the rate of change in the Consumer Price Index (CPI) from one month to the other.
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- Disinflation: Refers to a deceleration in the rate of inflation and occurs when the general price level is still increasing but at a slower pace than before.
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- Reserve Money: Measures the stock of the Central Bank’s most liquid liabilities, which include currency issued, statutory reserves and banks’ excess reserves at RBZ.
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- Broad Money: Known as money supply, measures the total stock of banking sector liabilities including all deposits and banknotes and coins (currency) in circulation.
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- Total Deposits: Measures the amount of all deposits in the banking sector, inclusive of foreign currency denominated deposits.
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- Total Foreign Reserves in ZiG Backing the Local Currency: Measures the value of cash, foreign exchange reserves including gold and other precious minerals, backing the stock of ZiG reserve money or ZiG deposits in the banking sector.
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- Non-Performing Loans: Measures the value of loans that have not met scheduled (re)payments for 90 days compared to total loans in the banking sector.
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- Market Liquidity Position: Refers to the amount of liquidity in the market comprising of excess reserves (banks’ deposits at Reserve Bank) and the total holding of non-negotiable certificates of deposits (NNCDs), which is available for banks to effect transactions through the national payment system platforms. A positive position signifies market surpluses while a negative position would imply shortages.
ADDITIONAL DEFINITIONS
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- Cash and Nostro Balances: Refers to the amount of foreign currency held by the Reserve Bank in cash and balances held with other banks outside Zimbabwe.
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- Gold Holding (Kgs): Refers to the total volume in kilograms of gold that the Reserve Bank of Zimbabwe holds.
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- Gold Holdings Value: Measures the value of the total volume of gold held by the Reserve Bank expressed in ZiG millions.
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- Other Reserves (in kind royalties): refers to the value of other minerals excluding gold that are received by the Reserve Bank as royalties.
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- Nominal Effective Exchange Rate (NEER): is the ratio of an index of a currency’s average exchange rate for a month to a weighted average of exchange rates for currencies of selected countries normally the country’s main trading partners.
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- Real Effective Exchange Rate (REER): is a measure of the NEER adjusted to an index of consumer price indices (CPIs) of a country’s main trading partners.
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- Equilibrium Exchange Rate: Refers to the level of the exchange rate that is consistent with economic fundamentals where the economy experiences both internal (price stability and sustained growth) and external balance (sustainable current account position).
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- Uncovered Foreign Currency Demand: Refers to the total demand for foreign exchange reported by authorized dealers to the Reserve Bank, which could not be met by the supply of foreign exchange in the willing buyer – willing seller (WBWS) market.
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- Willing-Buyer Willing-Seller (WBWS) Exchange Rate: Refers to the average ZiG to US$ exchange rate set in the FX market by authorized dealers.
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- Implied Exchange Rate: Is the ratio of ZiG bank deposits to FX reserves.
