By Jonathan Mbiriyamveka
The Reserve Bank of Zimbabwe (RBZ) has shown unwavering commitment to stabilizing the country’s economy, but the future of the Zimbabwean Dollar (ZiG) remains uncertain.
In its 2025 monetary policy statement, the central bank reaffirmed its tight control over the money supply, maintaining high interest rates and seeking to promote the local currency. However, the success of ZiG in replacing the US dollar remains a major challenge.
The government’s efforts to boost the local currency include measures such as increasing deposit rates and offering 50:50 ZiG/US dollar tax payments, which were introduced at the end of 2024.
However, despite these steps, many Zimbabweans still hold a deep mistrust of the ZiG, with many preferring to save and transact in US dollars due to ongoing concerns about inflation and currency instability.
“Confidence in the ZiG remains fragile,” says economist and chartered banker Persistence Gwanyanya.
“Zimbabweans are reluctant to let go of the US dollar because of the history of hyperinflation and the fact that the ZiG has not been able to prove itself as a store of value.”
The RBZ’s efforts to improve ZiG’s stability have included bolstering foreign currency reserves, which are now more than three times the ZiG reserve money, providing some reassurance to market participants.
The government has also attempted to drive demand for the currency through campaigns, especially targeting rural areas, where the use of ZiG remains limited.
However, challenges remain. High inflation, currency devaluation, and limited foreign exchange inflows continue to undermine the ZiG’s role in the economy. Until there is greater public confidence and demand for ZiG, the country’s transition to full de-dollarization could remain elusive.
With the RBZ pushing to reduce dollarization, the real test will be whether Zimbabweans are willing to adopt ZiG as their primary currency.
It remains to be seen whether the tight monetary policy and new initiatives will be enough to convince consumers and businesses that ZiG can be a safe, stable, and viable long-term option.
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