•  The ZiG’s current stability is primarily driven by deliberate domestic policy measures creating scarcity, restricting ZiG circulation to less than 20% of economic transactions
• Deep dollarisation persists, with over 80% of corporate earnings reported in US dollars contradicting official claims of around 60%; basic needs remain priced and settled in USD
• External reinforcement comes from record gold export earnings US$4.6 billion in 2025, commodities rally, stronger rand, and contained ZiG inflation

Harare- Zimbabwe's local currency, the ZiG, has maintained its stability against the US dollar since the beginning of 2026 continuing the trend observed post devaluation in 2024, moving from trading around ZiG 26 per dollar in 2025 to appreciate to around ZiG 25 per dollar in January 2026, a trend that has persisted into February 2026.

On 4 February 2026, the currency traded at ZiG 25.67 per dollar, depreciating by a marginal 0.3% week on week. In January, the currency depreciated by 1%, taking the year-to-date decline to 0.98%. The interbank rate has hovered steadily around ZiG 25 per US dollar with minimal fluctuations, while the parallel market premium has remained contained without signs of widening acceleration, trading at around ZiG 33 per dollar.

This steadiness is primarily the result of deliberate domestic policy measures that have created artificial scarcity of the ZiG, severely restricting its supply and circulation in the economy. The Reserve Bank of Zimbabwe has pursued an aggressive contractionary monetary policy, holding the policy rate firm at 35% while corporate lending rates have risen above 40%.

This has effectively starved industry and commerce of affordable credit, limiting the supply in the system. The issuance of Negotiable Certificates of Deposit (NNCDs) has absorbed excess liquidity from the financial sector, further tightening money supply.

At the same time, the government has systematically deferred payments to suppliers and contractors, delaying the injection of ZiG into the broader economy and keeping reserve money and broad money supply extremely thin.

Corporate financial results reveal the extent of this scarcity and the deep dollarisation that underpins the ZiG’s stability. More than 90% of corporate earnings and revenues are denominated in US dollars, with large and medium-sized businesses conducting at least 80% of their transactions in foreign currency.

This reality directly contradicts the government’s repeated claims that the ZiG’s share in the economy is now over 40%. Basic goods and services like fuel, passports, vehicle licences, most key government taxes, school fees, medical bills, and many utility payments continue to be quoted and settled predominantly in US dollars.

With actual ZiG circulation confined to less than 20% of actual economic transactions, even modest inflows of foreign currency from exports exert disproportionate upward pressure on the local currency’s value, helping anchor the interbank rate around ZiG 25–26 per US dollar.

The engineered scarcity has successfully suppressed demand for ZiG in informal channels, keeping the parallel market premium contained and preventing acceleration.

On the external front, gold prices have extended their structural rally, supported by geopolitical uncertainty, central-bank reserve diversification, and sustained safe-haven demand from both official and private buyers.

Gold now contributes 45–47% of Zimbabwe’s export earnings and serves as the primary external anchor for the ZiG, which is backed by gold reserves and foreign exchange. In 2025 the country achieved a record US$4.6 billion in gold export earnings, generating over US$100 million in royalties alone.

Higher international gold prices have translated into stronger foreign currency inflows, enabling the Reserve Bank to accumulate reserves and maintain credible backing for the ZiG while cushioning the balance of payments against external shocks.

Regionally, South Africa’s decision to hold its repo rate unchanged at 6.75% in late January 2026 allowed the rand to firm further against the US dollar. A stronger rand moderates the cost of imports from South Africa, Zimbabwe’s largest trading partner for food and consumer goods  thereby helping contain imported inflation pressures even as domestic price data remains subdued.

Domestically, January 2026 inflation data confirmed continued disinflation, with ZiG inflation at 4.1% year-on-year,  the lowest in over 20 years,  while USD inflation also stayed in single digits. Banks reported marginally improved ZiG note availability, reflecting measured adjustments aimed at enhancing transactional usability without loosening overall monetary control.

Annual trade figures showed strong export performance and a narrow trade deficit, with gold again the dominant contributor, further reducing near-term external pressures.

The spread between official and parallel market rates persists but has not widened, largely due to structural liquidity distribution issues rather than deteriorating fundamentals. With foreign currency receipts continuing to build and official market activity normalising, conditions remain conducive to gradual premium compression over the coming months.

Therefore, the ZiG’s current stability is fundamentally driven by a contractionary policy framework that has engineered artificial scarcity through high interest rates, NNCD absorption, deferred government payments, and very limited circulation (under 20% of transactions). This scarcity effect is amplified by record gold export inflows and a supportive global and regional environment, particularly the gold price rally and rand strength.

However, the deep dollarisation of the real economy, evidenced by over 80–90% of corporate earnings in USD means the ZiG’s stability reflects suppressed local-currency demand rather than genuine market confidence or widespread adoption.

Looking ahead, sustained gold inflows, a softer US dollar, and firmer regional currencies will continue to shape dynamics, but the long-term durability of the ZiG will hinge on whether policy gradually broadens circulation and fosters deeper domestic acceptance or remains dependent on tight controls and commodity windfalls.

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