Online Reporter
Sikhulekelani Moyo [email protected]
AFRICA Economic Development Strategies (AEDS) says Zimbabwe’s path to durable stability now hinges on sustained policy discipline, wider use of ZiG and structural reforms to lock in gains made in the first half of the year.
In its Second Quarter Economic Review and 2026 Economic Outlook, AEDS notes that the ZiG/US rate has held between ZiG25–27/US and reserves have risen to over US$1,6 billion.
With the parallel market premium projected to narrow to 15 percent, the review says the focus must shift to consolidating stability.
Key recommendations to sustain stability, as recommended by AEDS, include deepening the use of ZiG in transactions.
A wider domestic circulation of the local currency is seen as critical to anchoring confidence and reducing reliance on the parallel market.
Secondly, AEDS said authorities must maintain fiscal and monetary discipline.
“Continued stability of the ZiG and, most critically, sustained fiscal discipline, which is key in avoiding monetisation of deficits, are listed as the central assumptions for the outlook,” said AEDS.
On monetary policy, the AEDS recommends that the policy should remain in a restrictive stance in the near term, before cautiously transitioning toward a more balanced approach later in 2026.
Even with possible modest rate easing later, AEDS said rates will remain high by regional standards to guard against inflationary pressures.
The think tank also emphasised the need to strengthen the credibility of monetary and fiscal institutions
The review also calls for further strengthening the credibility of monetary and fiscal institutions.
It said that restoring trust is part of transitioning from fragile to durable stability, characterised by deeper use of the ZiG in financial transactions and the restoration of credibility in the Central Bank and the Government policies.
To improve market efficiency, AEDS urged the Reserve Bank to fast-track reforms.
“The MPC commended the significant progress made on this front and underscored the need to expedite its finalisation to further enhance efficiency in foreign exchange trading,” added AEDS.
The new electronic foreign exchange management trading system for authorised dealers is expected to create a more competitive, transparent, credible, efficient and flexible foreign exchange market.
This is key to fostering confidence and mitigating perceptions of administrative control by the central bank.
Beyond macro stability, the review says authorities must continue to deepen the implementation of structural policies, which are a priority requirement for import substitution, export growth, and job creation.
The report projects that with these measures, both the parallel market and interbank exchange rates will remain broadly stable throughout the remainder of 2026 and volatility will continue to decline.
“Zimbabwe is transitioning to a state of increasingly durable stability, characterised by reduced volatility, narrowing market segmentation, and growing confidence in the domestic currency,” reads the report.
The review concludes that success in 2026 will be two-pronged, extending the stability horizon to 2026 and beyond, backed by discipline today to avoid a reversal tomorrow.
Colletta Dube