The Zimbabwean ZiG currency stayed in a narrow range this week. The USD/ZWG exchange rate remained around 26.19, where it has been most of this year.
President Mnangagwa said the country will not fully abandon the US dollar. ZiG will be used for local transactions, but dollar-based assets like stocks and bonds will not need to convert to ZiG.
The ZiG has grown in popularity. It now accounts for about 40% of transactions, up from less than 20% a year ago. The US dollar still dominates, but its share is falling.
The currency also stayed steady after the government announced a new gold royalty system. Starting January, royalties will rise with the gold price: 3% if gold is under $1,200, 5% between $1,201 and $2,500, and 10% above $2,500. This ties the ZiG more closely to gold and strengthens its backing with foreign currency reserves.
The government plans to increase spending to support economic growth, targeting ZWG 290 billion, or about $11 billion, in 2026.
The ZiG was launched in April last year, backed by gold and the US dollar. It had a slow start, and the central bank devalued it by 43% in September to reduce the gap with black market rates.
Zimbabwe aims to make ZiG the main currency by 2030, once reserves are strong enough. The central bank says it has enough reserves to cover the next three to six months and expects to reach full mono-currency status by 2030.
Still, many Zimbabweans remain skeptical. Past experiences with failed local currencies have made people cautious about ZiG’s long-term stability.
