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ZiG to strengthen further
2 hrs ago |
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Finance, Economic Development and Investment Promotion Minister Mthuli Ncube says Zimbabwe's local currency, the ZiG (ZWG), is expected to strengthen further in the fourth quarter of 2025 as demand increases for tax payments and other statutory obligations.
Addressing parliamentarians during the pre-budget seminar in Bulawayo on Wednesday, Ncube said the local unit continues to benefit from tight monetary measures and growing market confidence.
"Fourth quarter taxes are expected to increase demand for ZiG, and the appreciation of the exchange rate," he said. "In the outlook, exchange rate stability is envisaged, underpinned by the broad acceptance of the ZiG and the continued implementation of prudent fiscal and monetary policies by Government."
The Reserve Bank of Zimbabwe has maintained a restrictive monetary policy stance since last year, including a 35% bank policy rate, to contain speculative borrowing and reduce liquidity pressures that fuel parallel market activity.
As a result, the exchange rate premium has remained stable for over a year, while annual inflation has fallen by more than 50% to 32.7%.
Ncube credited the sustained currency stability - with the ZiG trading around US$1:ZWG26.68 - to firm monetary controls and improved market discipline.
"The parallel market exchange rate premium has remained stable, falling to below 25% in August 2025, aligning with other countries including Kenya and Zambia," he noted.
The minister also reported that Zimbabwe's foreign currency reserves have surged from below US$300 million in April 2024 to over US$900 million by September 2025, with a target of US$1 billion by December. The reserves, made up of gold and US dollar holdings, now provide full backing for ZiG reserve money and deposits.
Looking ahead, Ncube projected that inflation will average 61.3% in 2025, decline to 22.8% by year-end, and reach single-digit levels by 2027, driven by continued currency stability and disciplined fiscal management.
"The strategy for accelerated building of foreign currency reserves is bearing fruit following the introduction of the ZiG," he added.
Addressing parliamentarians during the pre-budget seminar in Bulawayo on Wednesday, Ncube said the local unit continues to benefit from tight monetary measures and growing market confidence.
"Fourth quarter taxes are expected to increase demand for ZiG, and the appreciation of the exchange rate," he said. "In the outlook, exchange rate stability is envisaged, underpinned by the broad acceptance of the ZiG and the continued implementation of prudent fiscal and monetary policies by Government."
The Reserve Bank of Zimbabwe has maintained a restrictive monetary policy stance since last year, including a 35% bank policy rate, to contain speculative borrowing and reduce liquidity pressures that fuel parallel market activity.
As a result, the exchange rate premium has remained stable for over a year, while annual inflation has fallen by more than 50% to 32.7%.
Ncube credited the sustained currency stability - with the ZiG trading around US$1:ZWG26.68 - to firm monetary controls and improved market discipline.
"The parallel market exchange rate premium has remained stable, falling to below 25% in August 2025, aligning with other countries including Kenya and Zambia," he noted.
The minister also reported that Zimbabwe's foreign currency reserves have surged from below US$300 million in April 2024 to over US$900 million by September 2025, with a target of US$1 billion by December. The reserves, made up of gold and US dollar holdings, now provide full backing for ZiG reserve money and deposits.
Looking ahead, Ncube projected that inflation will average 61.3% in 2025, decline to 22.8% by year-end, and reach single-digit levels by 2027, driven by continued currency stability and disciplined fiscal management.
"The strategy for accelerated building of foreign currency reserves is bearing fruit following the introduction of the ZiG," he added.
Source - online
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