- ZiG halts momentum with a 0.003% weekly retreat to ZWG26.39/USD, ending recent gains despite record mineral export earnings
- Structural cracks deepen as deferred supplier payments exceed US$1 billion and infrastructure overspend hits over 100% of the budget, crowding out private sector
- ZiG liquidity share remains below 25%, undermining RBZ’s 50% usage claim and casting doubt on sustainable dedollarisation
Harare- The Zimbabwe Gold (ZiG) currency paused its appreciation streak against the US dollar during the week to7 November 2025 on Friday, registering a marginal week-on-week depreciation of 0.003% to close at ZWG26.39 per USD.
Year-to-date, the ZiG has weakened by a modest 2.23% on the official Willing-Buyer Willing-Seller (WBWS) market, contrasting sharply with an 18% appreciation on the parallel market.
This divergence highlights persistent confidence gaps between formal and informal channels.
The ZiG’s relative resilience stems from a confluence of factors. Globally, gold prices have surged 54% year-to-date, propelled by heightened geopolitical risks, including Russia’s protracted war in Ukraine, Israel’s military operations in the Middle East, and escalating US trade tariffs against major trading partners.
Platinum Group Metals (PGMs), Zimbabwe’s other pillar export, have also rebounded impressively by 50% after years of depression, offering a promising near-term outlook.
Together, gold and PGMs account for over half of Zimbabwe’s export earnings, driving record foreign exchange inflows and positioning the country for its strongest Balance of Payments surplus in years. Increased USD supply has naturally eased pressure on the official exchange rate, supporting ZiG stability.
Domestically, improved power generation and a rebound in agricultural output have helped curb import demand, while fiscal and monetary discipline has played a crucial role. The Reserve Bank of Zimbabwe (RBZ) has maintained a tight monetary stance, keeping policy rates elevated and deploying short-term paper to sterilise excess liquidity.
Reserve money growth has been contained at single-digit levels, while gross reserves have climbed to US$930 million. Government efforts to widen the tax net through informal-sector formalisation and curtailing extra-budgetary spending have reduced reliance on RBZ deficit financing, a previous trigger of hyperinflationary spirals.
Despite these achievements, structural vulnerabilities persist. ZiG utilisation remains below 25% of total market liquidity, contradicting RBZ claims of over 50% adoption. With insufficient local-currency balances in circulation, transaction dominance continues to favour USD, limiting the sample size from which to infer durable stability ahead of full dedollarisation.
Deferred supplier payments have ballooned past US$1 billion and continue rising, embedding hidden fiscal liabilities. Infrastructure spending has exceeded budgetary allocations by 100%, while health and education outlays languish at 30% of planned levels, crowding out private-sector credit and inflating project costs through punitive domestic borrowing rates and rent-seeking premiums.
Zimbabwe’s quarter-century exclusion from concessional multilateral financing has forced Treasury to rely exclusively on internally generated revenue, elevating the cost of capital across the economy. Until sanctions are lifted and arrears cleared, enabling re-engagement with the IMF and World Bank, fiscal pressures will remain acute. Sustainable currency stability ultimately hinges on seizing the debt-resolution window to unlock lower-cost external funding and relieve domestic borrowing burdens.
In summary, while fundamental and technical indicators support cautious optimism for the ZiG in the near term, underpinned by record mineral earnings, disciplined policy, and range-bound price action, longer-term entrenchment demands resolution of legacy debt, higher ZiG liquidity, and elimination of payment arrears.
Until these milestones are achieved, the currency’s track record of mismanagement will continue casting a long shadow. Investors should retain a cautiously optimistic outlook as technical consolidation without structural reform offers only temporary reprieve.
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