WORLD BANK WARNS ZIMBABWE AGAINST RUSHING TO ABANDON US DOLLAR FOR ZiG
The World Bank has cautioned Zimbabwe against moving too quickly to end the widespread use of foreign currencies as the country seeks to establish the Zimbabwe Gold currency, known as ZiG, as its dominant national currency.
Zimbabwe currently operates a multicurrency system in which the US dollar remains widely used alongside the ZiG.
The government intends to transition away from the multicurrency system by 2030 as part of efforts to restore full monetary sovereignty.
However, the World Bank has stressed the importance of establishing lasting confidence in the domestic currency before pushing the economy further towards dedollarisation.
CONFIDENCE IN ZiG REMAINS CRITICAL
Zimbabwe introduced the ZiG in April 2024 following years of currency instability and high inflation.
The currency is backed by foreign currency reserves and precious metals, including gold.
The World Bank says Zimbabwe has recently made significant progress in stabilising its economy.
Local currency inflation fell into single digits in early 2026 for the first time since 1997, while the gap between official and parallel exchange rates has also narrowed considerably.
However, Zimbabwe remains heavily dollarised.
Businesses and households continue to rely extensively on US dollars following years of declining confidence in previous domestic currencies.
Moving too rapidly away from foreign currencies before sufficient confidence has been established could undermine those recent stabilisation gains.
ZIMBABWE TARGETS 2030
Zimbabwe has maintained plans to move towards greater use of its domestic currency by 2030.
For such a transition to succeed, economists say citizens and businesses must voluntarily become comfortable holding, saving and conducting transactions in ZiG.
A forced or premature transition could encourage people and businesses to move money outside the formal financial system, increase demand for foreign currency on unofficial markets and weaken investor confidence.
The World Bank has therefore emphasised continued fiscal and monetary discipline as Zimbabwe attempts to rebuild trust in its monetary system.
Zimbabwe has experienced several currency crises over the past two decades, making public confidence one of the biggest challenges facing the ZiG.
The success of the government's 2030 strategy may ultimately depend less on simply restricting foreign currencies and more on convincing Zimbabweans that their local currency can reliably preserve value.
VNTV
