Zimbabwe says single-currency switch hinges on market conditions

Bloomberg

Zimbabwe’s transition to a single currency will be driven by market conditions and macroeconomic stability, rather than a fixed timetable, central bank Governor John Mushayavanhu said.

The southern African country had initially set 2030 as the deadline to phase out the domestic use of dollars and make its gold-backed ZiG its only currency.

The switch will only take place once key conditions are met, including low and stable single-digit inflation and foreign exchange sufficient to cover three-to-six months of imports, Mushayavanhu said.

“Let me reiterate that the transition to mono currency, which has been talked about, is going to be market led,” he told bankers in the capital, Harare.

The nation is currently sitting on about 1.8 months of import cover, he said. “There is no single foreign-exchange invoice that has not been honored. We are up to date with our payments.”

In April 2024, the country introduced the ZiG, short for Zimbabwe Gold, in an effort to stabilize the exchange rate and tame inflation.

Mushayavanhu also said authorities will introduce a planned digital foreign-exchange trading system in the fourth quarter.

“The system has undergone rigorous peer review by the World Bank and as such, is expected to further improve price discovery in the foreign-exchange market.”

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