• ZiG posts historic year-to-date gains vs USD for the first time in over 20 years, firming to 26.1954 amid broad-based US dollar weakness and record gold/PGM export earnings
• Corporate results reveal >70% of sales still in USD and ZiG liquidity share below 25%, casting doubt on RBZ claims of 50–60% transaction usage and suggesting current stability is largely illusory
• Sustained ZiG strength hinges on continued commodity windfall and tight policy, but growing US$1bn+ supplier arrears, infrastructure over-spend, and lack of external financing remain major risks to long-term dedollarisation

Harare- The Zimbabwe Gold (ZiG) opened the week of 24 November 2025 stronger at 26.2965 per US dollar, marking a notable firming from 26.3218 recorded on Friday 21 November and a significant appreciation from the record low of 26.3396 reached on 15 November 2025.

On 26 November, the local unit continued its upward trajectory, trading at 26.1954 from 26.2874 the previous day. This steady appreciation has, for the first time in over two decades, resulted in the ZiG posting year-to-date gains against the US dollar, an achievement unseen by any previous Zimbabwean currency.

The primary driver of this unexpected strength has been pronounced weakness in the US dollar itself, which is currently experiencing one of its worst performances in years against a broad basket of major currencies, including the British pound, euro, Japanese yen, Canadian dollar, and notably the South African rand.

While global dollar weakness has been driven by heightened risk aversion, tighter-than-expected US monetary policy outcomes, persistent elevated US inflation, ballooning US fiscal deficits, and geopolitical shocks, including the prolonged Russia-Ukraine war, the recent Gaza ceasefire, Donald Trump’s re-election and threatened global tariffs, and the growing appeal of alternative stores of value such as gold, cryptocurrencies, and BRICS-led initiatives, the ZiG’s gains have been amplified by favourable domestic fundamentals.

Zimbabwe has benefited immensely from record-high global gold and platinum-group-metal (PGM) prices, with gold up 55% year-to-date and domestic gold production rising 38% year-on-year. These two commodity classes still account for over 40% of the country’s export earnings, driving the highest foreign-exchange inflows on record and substantially increasing the supply of US dollars in the market.

This increased dollar liquidity has rebalanced exchange-market dynamics in favour of the local unit. Additional support has come from improved power generation, a recovering agricultural sector that has moderated food-import bills, sustained fiscal prudence, and a deliberate policy of not financing budget deficits through central-bank money printing.

The Reserve Bank of Zimbabwe (RBZ) has maintained a genuinely tight monetary-policy stance, keeping policy rates elevated, issuing liquidity-absorbing short-term instruments, capping reserve-money growth, and rebuilding gross reserves to approximately US$1 billion, an amount that, while still insufficient to fully cover three months of imports, represents meaningful progress. Independent audits of reserve accumulation have been commissioned, adding credibility to the process.

 Persistent Dollarisation and Contradictory Utilisation Claims

Despite the official narrative of currency strengthening rooted in robust fundamentals, corporate earnings reports paint a starkly different picture on the ground. Latest results from listed Zimbabwean companies show that, on average, more than 70% of sales continue to be denominated and settled in US dollars, with both revenues and costs growing in volume and value terms almost entirely in hard currency.

This confirms that actual utilisation of the ZiG in real economy transactions remains extremely low. The near-absence of local-currency circulating balances means the observed “stability” and “strengthening” of the ZiG is occurring in an artificially thin market with minimal transactional demand, a classic case of illusory stability driven by lack of supply rather than genuine confidence or usage.

The RBZ has repeatedly claimed that ZiG now accounts for over 40–45% of broad-money transactions in recent months, but these assertions directly contradict both corporate financial statements and the observable ZiG-to-total-liquidity ratio, which independent analysts place below 25%.

With such a small share of total liquidity actually held in local currency, it is mathematically implausible for ZiG to dominate transactional volume to the extent officially stated. Until verifiable, transaction-level data reconciles these discrepancies, caution is warranted in interpreting the ZiG’s recent exchange-rate performance as evidence of sustainable dedollarisation. 

Therefore, businesses should maintain a cautiously optimistic stance on the currency outlook. While the combination of surging mineral export revenues, genuine monetary restraint, and the absence of overt money-financed deficits constitutes the most credible stabilisation effort in decades, deep-seated risks remain.

Chief among these is the rapid build-up of deferred supplier and contractor payments, now exceeding US$1 billion and still growing. Infrastructure spending has already doubled beyond budgeted amounts in 2025, while critical social sectors such as health have received barely 30% of allocated funds, illustrating severe expenditure distortion and private-sector crowding out. Financing these overruns through punitively expensive domestic sources inflates project costs via both the time value of delayed payments and embedded rent-seeking premiums.

More fundamentally, running a modern economy solely on internally generated revenue, without recourse to concessional external financing, places intolerable strain on the budget and the financial system. For the past quarter-century, Zimbabwe has been cut off from IMF, World Bank, and other multilateral funding windows because of arrears and sanctions.

A durable solution to currency instability and economic crowding-out ultimately hinges on successfully clearing those arrears and re-engaging with international financial institutions. Until that door reopens, the Treasury will continue to face extraordinary pressure, and the risk of policy slippages will remain elevated. 

Hence, while the ZiG’s recent appreciation against a broadly weaker US dollar, underpinned by record commodity earnings and credible domestic policy discipline, is commendable and unprecedented in recent history, the currency’s extremely low transactional footprint means current stability should not yet be extrapolated into confidence about successful, irreversible dedollarisation. Sustainable currency reform will ultimately require not just continued isolation, but a decisive debt-resolution breakthrough that restores access to affordable external capital.

Equity Axis News