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Zimbabwe sets 2030 deadline for mono-currency regime
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The Reserve Bank of Zimbabwe (RBZ) has announced that the country is on course to adopt a mono-currency system by 2030, with the Zimbabwe Gold (ZiG) set to become the sole legal tender for all domestic transactions.
At present, Zimbabwe operates under a multi-currency system in which ZiG is used alongside foreign currencies. The central bank explained that while the shift to a single currency will make ZiG the only acceptable means of payment for local transactions, the transition does not amount to a re-denomination exercise. Citizens and businesses will still be able to hold both ZiG and foreign currency accounts, but those holding foreign currency will be required to convert it into ZiG whenever they need to make domestic payments. Banks will, however, continue to facilitate foreign currency access for legitimate purposes such as imports, travel and medical expenses.
The RBZ said the migration towards a mono-currency system will be gradual and market-driven, underpinned by policy measures aimed at strengthening stability and confidence in ZiG. The bank noted that growing trust in the currency, coupled with its wider use in the economy, would ensure that individuals, businesses and other economic actors progressively adopt ZiG as the natural currency of choice.
Key milestones identified by the RBZ include increasing foreign reserves to meet regional best practices of between three and six months of import cover, reducing inflation to 30 percent by the end of 2025 and achieving single-digit inflation from 2026 onwards. The central bank also stressed the importance of maintaining exchange rate stability by keeping the parallel market premium under 30 percent.
With these measures in place, the RBZ believes Zimbabwe will successfully transition into the exclusive use of ZiG as its national currency by 2030.
At present, Zimbabwe operates under a multi-currency system in which ZiG is used alongside foreign currencies. The central bank explained that while the shift to a single currency will make ZiG the only acceptable means of payment for local transactions, the transition does not amount to a re-denomination exercise. Citizens and businesses will still be able to hold both ZiG and foreign currency accounts, but those holding foreign currency will be required to convert it into ZiG whenever they need to make domestic payments. Banks will, however, continue to facilitate foreign currency access for legitimate purposes such as imports, travel and medical expenses.
The RBZ said the migration towards a mono-currency system will be gradual and market-driven, underpinned by policy measures aimed at strengthening stability and confidence in ZiG. The bank noted that growing trust in the currency, coupled with its wider use in the economy, would ensure that individuals, businesses and other economic actors progressively adopt ZiG as the natural currency of choice.
Key milestones identified by the RBZ include increasing foreign reserves to meet regional best practices of between three and six months of import cover, reducing inflation to 30 percent by the end of 2025 and achieving single-digit inflation from 2026 onwards. The central bank also stressed the importance of maintaining exchange rate stability by keeping the parallel market premium under 30 percent.
With these measures in place, the RBZ believes Zimbabwe will successfully transition into the exclusive use of ZiG as its national currency by 2030.
Source - the herald
