HARARE – The International Monetary Fund (IMF) has urged Zimbabwe to clarify the implications of its plan to phase out the use of the United States dollar by 2030, warning that the newly introduced ZiG currency has yet to gain traction among the public amid lingering doubts about monetary policy credibility.
In a statement concluding its 2025 Article IV Consultation with Zimbabwe on Thursday, the IMF said while recent policy tightening had brought some macroeconomic stability, “important challenges remain” — particularly low domestic currency monetisation and public confidence.
The ZiG, introduced in April 2024 to replace the short-lived Zimbabwe dollar, was meant to anchor price stability and restore trust in local money. But nearly 18 months later, the currency remains scarce in circulation, with most businesses and consumers continuing to trade almost exclusively in US dollars.
Many Zimbabweans have never seen the ZiG in physical firm.
The IMF noted that despite efforts by the Reserve Bank of Zimbabwe (RBZ) to halt monetary financing and tighten policy, the ZiG’s monetary base expanded by 215 percent between April and September 2024, contributing to an overnight depreciation of the currency before it later stabilised. L
Inflation has since eased to 0.3 percent in June 2025.
Still, the Fund cautioned that the ZiG’s limited acceptance and Zimbabwe’s heavy dollarisation — estimated at over 80 percent of transactions — underline the fragility of current stability.
“Directors underscored the importance of enhancing the monetary and foreign exchange frameworks to increase policy effectiveness and credibility,” the IMF said.
It urged the authorities to “encourage ZiG demand” and “increase clarity on the mono-currency transitional plan,” referring to government’s stated goal of ending the dual currency system by 2030.
Fiscal pressures also remain acute. The IMF said public spending needs, including wages, capital projects and debt servicing related to the Mutapa Investment Fund, had led to nearly US$600 million in unpaid domestic arrears in 2024, financed partly by Treasury bills and RBZ overdrafts.
The Fund projected Zimbabwe’s economy to rebound by 6 percent this year on the back of a strong agricultural season, high gold prices and steady remittances, but warned that medium-term growth would slow to about 3.5 percent unless confidence improves and fiscal imbalances are addressed.
The IMF’s executive directors urged Zimbabwe to maintain fiscal discipline, rationalise tax incentives, and strengthen the governance framework of the Mutapa Fund “to help control fiscal risks.”
Zimbabwe continues to seek debt relief and reengagement through the Structured Dialogue Platform, which brings together international creditors, donors, and the government to negotiate on arrears clearance and reform commitments.
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