Online Reporter
Martin Kadzere
THE Reserve Bank of Zimbabwe (RBZ) has said it is committed to fostering a robust foreign exchange market that guarantees the seamless liquidation of United States dollar-denominated assets — including foreign currency account (FCA) balances — into the local currency.
This ensures that transactors can move fluidly between domestic and foreign currency holdings once the mono-currency system takes effect.
Speaking at an African Economic Development Strategy-hosted dialogue on Thursday, RBZ chief director Dr Nicholas Masiyandima emphasised that a robust foreign exchange market is critical to the mono-currency road map.
He said the objective is to reach a level of market efficiency where liquidating US dollar-based financial assets into the local currency is as seamless as moving from the domestic unit back into foreign exchange, mirroring the functionality of established global markets.
“If you want to get foreign currency . . . you can think of easy access to foreign currency from the banks and authorised dealers at that point,” Dr Masiyandima told the delegates.
“It should be possible at that particular point, given that one of the requirements is that we will need to have satisfied the import cover of six months to make sure that the exchange rate will be stable.
“At that particular (time, a) well-functioning foreign exchange market will also ensure that the exchange rate that will prevail at any particular point in time will not give you an advantage in terms of arbitrage in moving into a US dollar asset or a ZiG-denominated asset,” he added.
Dr Masiyandima said the central bank was fine-tuning the foreign exchange market to ensure that, following the transition to mono-currency, a robust and efficient framework would facilitate a market-determined exchange rate that accurately reflects the true value of foreign currency.
At the appropriate time, market conditions will naturally incentivise transacting and holding assets in the local currency, as the exchange rate risks previously associated with the domestic unit would have been effectively neutralised.
The transition towards a mono-currency system in Zimbabwe is no longer governed by the previously set 2030 deadline; instead, the Government has adopted a conditions-precedent strategy, where full implementation is contingent upon achieving specific macroeconomic stability indicators.
A major condition for the shift is the accumulation of foreign currency reserves. While reserves have grown to cover 1.5 months of imports (up from 0,3 months in early 2024), the Reserve Bank is targeting a strong buffer of six months before a full transition to mono-currency is triggered.
Dr Masiyandima noted that shifting the mono-currency transition from a date-driven deadline to a conditions-based framework is a “significant advantage”, as it mitigates the potential “market panic” associated with a rigid cut-off point.
By removing the pressure of a specific date, the central bank aims to prevent wealth holders from making abrupt, disruptive shifts in their portfolios, which could destabilise the financial sector and the broader economy.
The introduction of the Zimbabwe Gold (ZiG) currency in April 2024 marked another attempt since 2009 to re-establish a stable domestic unit. Following the abandonment of the original Zimbabwe dollar in 2009 due to hyperinflation, Zimbabwe operated under a multi-currency basket dominated by the US dollar.
Early efforts to reintroduce local liquidity included the 2014 bond coins and 2016 bond notes, which eventually paved the way for
the 2019 reintroduction of the RTGS dollar (ZWL).
However, the Zimbabwe dollar faced rapid depreciation, prompting the Government to re-legalise the US dollar in 2020 to ensure transactional stability during the Covid-19 pandemic.
Zimbabwe has made significant progress towards fulfilling conditions for the domestic mono-currency.
Foreign currency reserve holdings at the central bank have, as of March 31, 2026, reached approximately US$1,3 billion, which covers about 1,5 months of imports.
Throughout 2025, the official exchange rate remained broadly stable between ZiG25 and ZiG27 per US$1.
On April 7, 2026, the RBZ began circulating upgraded “BiG 5” ZiG banknotes (ZiG10, ZiG20 and ZiG50) to improve transaction convenience and durability.
To encourage usage, weekly withdrawal limits were increased to ZiG10 000 for individuals and ZiG100 000 for corporates.
Digital ZiG transactions have
risen from 20 percent in 2024 to 30-40 percent of national payment volume by early 2026.
The Ministry of Finance, Economic Development and Investment Promotion has committed to a “no-overdraft” policy, funding requirements through taxes rather than borrowing from the RBZ.
A tight monetary policy remains in place, with the bank policy rate at 35 percent to curb speculative borrowing and excess liquidity.
