A sharp fall in inflation to single digits for the first time since 1997 strengthens the government’s case for making the gold-backed ZiG the country’s sole currency by 2030, as authorities point to rising reserves and tighter policy coordination

Zimbabwe’s annual inflation rate has fallen to single digits for the first time in nearly three decades, a milestone authorities say strengthens the country’s push to make its gold-backed currency, the Zimbabwe Gold (ZiG), the sole legal tender by the end of the decade.

Inflation slowed sharply to 4.1 per cent in January, down from 15 per cent in December, marking the first instance of single-digit inflation since 1997, according to official data.

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“This marks a historic moment for Zimbabwe,” Finance Minister Mthuli Ncube told Bloomberg News in an emailed statement, noting that the development comes almost 30 years after the country last achieved such price stability in its domestic currency.

The steep disinflation comes as pressure on the ZiG eases following months of volatility after its launch in April 2024. The currency was introduced after repeated failures of previous monetary systems and years of reliance on the US dollar amid runaway inflation.

The ZiG, short for Zimbabwe Gold, is the country’s sixth attempt since 2009 to establish a functional local currency capable of replacing the greenback as the primary medium of exchange. Past efforts collapsed under the weight of fiscal indiscipline, money printing, and dwindling foreign reserves.

To avoid a repeat, the Reserve Bank of Zimbabwe has laid out strict benchmarks that must be met before the ZiG can become the country’s sole currency. These include maintaining inflation in single digits and accumulating enough foreign reserves to cover three to six months of imports.

According to Ncube, foreign assets backing the ZiG rose sharply to $1.2 billion by December 2025, from just $276 million in April 2024, providing greater credibility to the currency’s gold-linked framework.

He told Bloomberg News the government would continue to pursue “well-coordinated monetary and fiscal policies” to entrench price stability and rebuild confidence in the local unit.

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Zimbabwe has long been a cautionary tale of hyperinflation, with prices spiralling out of control in the late 2000s, ultimately forcing the abandonment of the Zimbabwe dollar and the adoption of foreign currencies. While inflation has remained volatile since then, the latest data suggests a rare period of macroeconomic stability.

Authorities have set 2030 as the target year for the ZiG to function as Zimbabwe’s sole currency, a goal that now appears more attainable if the current disinflationary trend holds.

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