By A Correspondent
The administration of President Emmerson Mnangagwa is seriously considering a major shift in Zimbabwe’s monetary policy that could result in the removal of the US dollar as legal tender. This follows strong recommendations from the International Monetary Fund (IMF) for the country to adopt a monocurrency regime centred on the Zimbabwe Gold (ZiG) currency.
Analysts believe the move—if implemented—would mark a turning point in Zimbabwe’s economic strategy by giving the Reserve Bank of Zimbabwe (RBZ) full control over monetary policy, which is currently constrained by the dominance of the US dollar in everyday transactions.
“For this, there are several measures that need to be in place, but first and foremost, we would like to see a deeper forex market that would make sure that there is full price discovery in the market,” said IMF mission chief Wojciech Maliszewski during a recent visit. “Right now, we see good stability in the official market, and we also see a convergence between the parallel market rate and the official rate, but ideally and ultimately, we would like to see an elimination of this gap.”
Maliszewski, who met President Mnangagwa at State House during his Article IV Mission to Zimbabwe, commended the government for its progress in stabilising the domestic currency. He noted that the ZiG had achieved “a level of stability sufficient to become the country’s sole legal tender,” contingent on the development of a more robust and transparent foreign-exchange market.
The ZiG currently accounts for about 30 percent of all transactions in the economy, while the remainder are conducted in US dollars. Zimbabwe has been using a multicurrency system since 2019, after reintroducing a domestic currency that had previously been abandoned during the hyperinflation crisis of 2008.
Economist Gladys Shumbambiri-Mutsopotsi expressed support for the IMF’s position, arguing that a monocurrency regime would bolster Zimbabwe’s monetary policy autonomy. “Under the current system, the RBZ’s toolkit is severely limited by the coexistence of multiple currencies. A single currency would strengthen the bank’s capacity to manage inflation, interest rates, and economic growth,” she said.
While the government has not officially confirmed the phasing out of the US dollar, senior officials have indicated that discussions are underway. The shift would represent a bold and politically sensitive move, especially given the public’s longstanding preference for the US dollar due to its perceived stability.
Market watchers warn that success will hinge on restoring public confidence in the local unit, deepening the forex market, and maintaining macroeconomic stability.
As the Mnangagwa regime weighs its next steps, the nation is bracing for what could be a significant realignment in the country’s monetary and economic landscape.