Online Reporter
Tapiwanashe Mangwiro, Zimpapers Business Hub
THE Reserve Bank of Zimbabwe (RBZ) has hailed 2025 as a decisive year for monetary and financial stability, citing falling inflation, exchange rate stability, foreign reserve accumulation and restored policy credibility as major highlights of the year.
In its Quarterly Snapshot on Recent Monetary, Currency, Price and Financial Developments as at 31 December 2025, the central bank said the outcomes reflected the effectiveness of a disciplined monetary policy framework.
The bank said its monetary policy is anchored on tight money supply management, improved fiscal coordination and a more flexible exchange rate system under the Willing-Buyer Willing-Seller arrangement.
“Monetary policy during 2025 demonstrated clear effectiveness, restored discipline, and measurable macroeconomic gains, particularly in inflation control and exchange rate stability.
“Sustaining this trajectory in 2026 will require continuing to walk the talk in prudent money supply management, foreign currency reserve accumulation and strong fiscal and monetary policy complementarity,” said RBZ Governor Dr John Mushayavanhu.
Among the central bank’s headline achievements was the sharp dissipation of ZiG annual inflation to 15 percent by the end of 2025, well below the 30 percent target.
Monthly inflation also remained contained, averaging 0,4 percent from February to December, reinforcing confidence that price stability had become entrenched rather than episodic.
The RBZ also cited sustained exchange rate stability as a key 2025 milestone.
The interbank exchange rate largely hovered around ZiG26 per US dollar, while the parallel market premium was kept below 20 percent for most of the year — a marked improvement from previous periods of severe misalignment.
Investment analyst Ms Rudo Ndlovu said the exchange rate and inflation outcomes materially change Zimbabwe’s economic outlook for 2026.
“When inflation is trending down and the exchange rate is broadly predictable, investors can finally begin pricing risk more rationally. For 2026, this opens space for longer-term contracts, improved portfolio flows and renewed interest in productive sectors, provided policy consistency is maintained,” Ms Ndlovu said.
She added that stable prices reduced pressure on wages and interest rates, improving the investment climate across manufacturing, mining and services.
On the monetary side, the RBZ highlighted that reserve money growth was kept under tight control at ZiG5,3 billion as at end-December 2025, while central bank financing of Government spending remained at zero, reinforcing fiscal discipline.
Economist Dr Shaun Chikovore said this restraint was critical for sustaining gains into 2026.
“Reserve money growth has historically been the trigger for inflationary episodes in Zimbabwe. The fact that growth was contained, alongside zero quasi-fiscal activity, signals a structural shift. If this discipline holds in 2026, inflation expectations are likely to remain anchored,” he said.
The RBZ also underscored improvements in the external sector.
Foreign currency receipts rose to US$16,2 billion in 2025, up from US$13,3 billion in 2024, enabling the central bank to accumulate reserves of US$1,2 billion, equivalent to 1,5 months of import cover.
Importantly, reserves now provide about six times cover of ZiG reserve money and nearly double the total ZiG deposits. According to the RBZ, this level of reserve backing is a cornerstone of confidence in the local currency and a buffer against external shocks.
A notable development in 2025 was the increased use of the ZiG, which accounted for 30-40 percent of transactions in the national payment system, while currency (cash) in circulation rose to ZiG510 million, representing 3 percent of broad money.
Economic analyst Mr Namatai Maeresera said rising ZiG acceptance reflected behavioural change rather than compulsion.
“The key difference in 2025 is that people are using the ZiG because it is stable, not because they are forced to. For 2026, wider acceptance will depend on continued exchange rate stability and confidence that purchasing power will be preserved,” he said.
Mr Maeresera noted that greater local currency usage reduced dollarisation risks and improved the effectiveness of monetary policy transmission.
The RBZ also reported that the financial sector and national payment system remained sound, resilient and stable throughout 2025, supported by improved liquidity management and stronger prudential oversight.
Taken together, the central bank said the 2025 outcomes significantly advance the conditions precedent for Zimbabwe’s roadmap towards a mono-currency system, as outlined under National Development Strategy 2 (NDS 2).
The strategy prioritises macroeconomic stability and financial sector deepening as foundations for achieving Vision 2030.
As Zimbabwe enters 2026, analysts broadly agree that the challenge now lies in maintaining consistency.
“The hard part is no longer stabilisation. It is proving that stability can be sustained. If RBZ and Treasury stay aligned, 2026 could be the year confidence turns into growth,” said Ms Ndlovu.
