Zimbabwe sets three-year plan to phase out US dollar
Zimbabwe plans to phase out the widespread use of the US dollar within the next three years as it works to rebuild confidence in its local currency and strengthen foreign-exchange reserves, a senior central bank official has said.
Deputy Central Bank Governor Innocent Matshe told mining executives in Harare that the country is now targeting a full return to a single national currency by 2030, supported by an expanding foreign-exchange buffer.
“We have enough foreign currency reserves that will be able to cover the next three to six months. By 2030, all things being equal, we will have enough foreign currency reserves to transition to a mono-currency,” Matshe is quoted.
Zimbabwe has struggled for more than a decade to restore a functioning national currency after bouts of hyperinflation forced the government to abandon the Zimbabwe dollar in 2009.
The most recent attempt, the ZiG, short for Zimbabwe Gold, was launched in April 2024 and now accounts for roughly 40% of daily transactions. The currency has been buoyed by a sharp rise in global gold prices, with mining companies benefiting from a 48% rally this year.
The gold boom has also lifted activity on the dollar-denominated Victoria Falls Stock Exchange, where several gold-linked stocks have performed strongly. Analysts say the trend has helped stabilise domestic markets and reduce pressure on the foreign-exchange system.
Matshe said the country currently holds around US$1 billion in reserves, but expects to accumulate enough over the next three years to meet the minimum import-cover threshold required for a fully independent national currency.
Zimbabwe’s central bank believes stronger reserves, along with a more stable ZiG, will allow the government to gradually end the dual-currency system and reduce reliance on the US dollar.
This story is written and edited by the Global South World team, you can contact us here.
