'Surge in forex inflows a boon for ZiG stability'
Zimbabwe's foreign currency receipts surged by 22 percent to US$6 billion in the first five months of 2025, according to the Reserve Bank of Zimbabwe (RBZ), a development analysts say strengthens the central bank's capacity to defend the Zimbabwe Gold (ZiG) currency and maintain economic stability.
The robust inflows place the RBZ in a solid position to uphold the value of ZiG, which was introduced in April 2024 to replace the inflation-battered Zimbabwe dollar. ZiG is backed by precious metals, including gold, and is central to the government's broader strategy of gradually transitioning towards greater reliance on local currency within the country's multi-currency framework, set to run until 2030.
According to the RBZ, the growth in forex receipts is driven primarily by strong global mineral prices boosting export earnings and a significant rise in diaspora remittances.
"The country has continued to receive foreign currency sufficient to meet its external payment obligations, leaving a significant surplus," said RBZ Governor Dr. John Mushayavanhu.
Export earnings dominated, contributing 55.9 percent of total inflows, followed by loans and credit facilities at 18.4 percent, and diaspora remittances at 15.4 percent.
Foreign currency receipts averaged US$1.2 billion per month from January to May 2025, comfortably exceeding external payments of around US$821 million monthly. The surplus - averaging US$378 million per month - has been instrumental in strengthening reserves, supporting domestic transactions, and ensuring currency stability.
"The additional dollars help rebuild net international reserves, which in turn support confidence in the domestic ZiG currency," said economist Godfrey Kanyenze.
He added that higher remittances were also bolstering household consumption and small-business activity, particularly in rural and peri-urban areas.
Professor Albert Makochekanwa, an economist at the University of Zimbabwe, projected continued growth in forex receipts driven by anticipated increases in gold production and buoyant mineral prices.
He forecasts full-year forex earnings to reach US$14 billion to US$15 billion in 2025, supported by strong performance from platinum, lithium, and gold exports, alongside rising remittances and moderate recoveries in agriculture and manufacturing exports.
Already, gold exports from January to May 2025 totalled US$748 million, a 24 percent increase over the same period last year.
The central bank's strategy of maintaining a tight monetary policy stance, coupled with progressive adoption of indirect monetary policy tools like open market operations (OMO), has helped stabilise inflation and support the ZiG.
The RBZ's communication strategy, as outlined in its February 2025 Monetary Policy Statement, has also played a key role in shaping market expectations and bolstering confidence in monetary policy decisions.
