Online Reporter
Tapiwanashe Mangwiro
The Reserve Bank of Zimbabwe (RBZ) has said that monetary and financial conditions improved significantly in 2025, with inflation easing substantially, the exchange rate stabilising and confidence restored in monetary policy.
According to the Quarterly Snapshot on Recent Monetary, Currency, Price and Financial Developments as at December 31, 2025, the central bank attributes the stability to disciplined money supply management, enhanced policy coordination with the Treasury and a more flexible exchange rate regime anchored on the Willing-Buyer Willing-Seller framework.
RBZ governor, Dr John Mushayavanhu, said in 2025, the monetary policy 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 Dr Mushayavanhu.
The snapshot shows that ZiG annual inflation declined to 15 percent by the end of 2025, well below the 30 percent target, while month-on-month inflation averaged just 0,4 percent between February and December, signalling sustained price stability.
This performance marked a decisive break from earlier volatility and helped anchor inflation expectations.
Exchange rate conditions also improved significantly. The interbank rate remained broadly stable, oscillating around ZiG26 per US dollar, while the parallel market premium was contained below 20 percent for most of the year.
The RBZ said this stability reflected improved foreign currency supply, increased market confidence and effective reserve backing of the local currency.
On the monetary side, reserve money growth was contained at ZiG5,3 billion by the end of December, while central bank financing of Government expenditure remained at zero, reinforcing fiscal and monetary discipline.
External sector performance strengthened further, with foreign currency receipts rising to US$16,2 billion in 2025, up from US$13,3 billion in 2024.
The improvement enabled the RBZ to accumulate foreign currency reserves of US$1,2 billion, equivalent to 1.5 months of import cover. The reserves now provide about six times cover of ZiG reserve money and nearly double the total ZiG deposits.
The snapshot also noted increased acceptance of the ZiG, now accounting for 30–40 percent of national payment system transactions, while cash in circulation rose to ZiG510 million, or 3 percent of broad money. Meanwhile, the financial sector remained sound, resilient and stable throughout 2025.
The RBZ said these outcomes substantially meet the conditions precedent for Zimbabwe’s roadmap to a mono-currency system under NDS 2, which prioritises macroeconomic stability and financial sector deepening in pursuit of Vision 2030.
