Online Reporter
Judith Phiri, [email protected]
RESERVE Bank of Zimbabwe (RBZ) Governor, Dr John Mushayavanhu, says monetary authorities are determined to keep inflation under check despite potential risks arising from geopolitical developments in the Middle East, which could trigger increases in global fuel prices.
Geopolitical tensions in the Middle East have escalated since last weekend, shifting from proxy conflicts to direct high-stakes military confrontations, which could exert pressure on international oil markets and subsequently impact domestic fuel costs.
Globally, studies have shown that rising fuel prices significantly drive inflation by directly increasing consumer energy costs and indirectly boosting production and transportation expenses for goods.
The increased costs often create cost-push inflation as businesses pass expenses to consumers, resulting in higher Consumer Price Index (CPI) figures and reduced purchasing power.
Speaking in Bulawayo while unpacking the 2026 Monetary Policy Statement and launching the upgraded Big 5 ZiG banknotes, Dr Mushayavanhu said Zimbabwe has successfully achieved single-digit inflation, underpinned by growing economic stability and steady prices of goods and services.
Notably, the economy has witnessed a progressive disinflation trend as evidenced by the significant decline in annual ZiG inflation from peak levels of 95,8 percent in July 2025 to low single-digit levels of 4,1 percent in January 2026.
“The decline in annual local currency inflation to single-digit levels is a significant milestone that has been achieved for the first time in over 30 years,” he said. “Importantly, the low inflation rate is a critical condition precedent for safeguarding the stability of the domestic currency.
“There are geopolitical issues that may interfere with our ability to achieve that. You are aware of the increase in the price of fuel that will arise from the tensions that are in the Middle East, but as monetary authorities, we are determined to ensure that we keep inflation at single-digit levels in 2026.”
Looking ahead, Dr Mushayavhanu said annual ZiG inflation is projected to remain within single-digit levels, supported by prudent monetary policy measures and complementary fiscal policy interventions.
Meanwhile, industrialist and board chairman for both the Zimbabwe International Trade Fair (ZITF) Company and Zimbabwe Investment and Development Agency (Zida), Dr Busisa Moyo, commended the monetary policy measures.
“For the big five, thank you, Governor. I was waiting for this because, for me, I said to the previous Governor that the moment we see a proper currency, then we know that this is serious, we are here to stay,” he said.
“So when we see these notes with the features, this is a lock-in. It means you are serious after investing so much in the process of actually printing. You don’t do that if you intend to introduce inflationary-type measures next year, because all these notes will become like the other notes we had. I am so really grateful that you have made this bold move.”
Dr Moyo commended the country for being on the right path to create its mono currency.
“We are so grateful that we have such a man, because we were used to things going in a particular direction. So, thank you. Thank you, Governor,” he added.
On investments as Zida chairman, Dr Moyo said: “Obviously, we take an interest in the foreign direct investment (FDI). FDI is very low, US$256 million. On the other hand, the loan amounts are going up. So, I think investors are preferring to bring in loan finance, as opposed to equity, which is more long-term. So, there maybe we may need to look at how we nudge the investor community or inward investments more towards FDI, which is patient and is less strenuous on capital repayments.”
Dr Moyo said the positive on the investment side was that Zimbabwe was a good platform now and dividend repatriation last year was somewhere in the order of US$350 million.
He also called for more ZiG notes circulation in the southern region of the country, which includes provinces such as Bulawayo, Matabeleland South and North.
Confederation of Zimbabwe Industries (CZI) Matabeleland Chapter president, Mr Stephen Ncube, commended the monetary authorities for bringing microeconomic stability.
He said since the introduction of ZiG in 2024, the economy has registered significant milestones and a significant decline in annual ZiG inflation to low single-digit levels.
