Harare, (New Ziana) – Zimbabwe’s inflation trajectory has taken a decisive downward turn, with annual ZiG inflation declining steadily to 15 percent by the end of 2025, and projections pointing to single-digit inflation for the first time in more than two decades, the Reserve Bank of Zimbabwe (RBZ) has said.
In its 2025 snapshot highlights update, the apex bank said the sustained inflation slowdown has been underpinned by remarkable month-on-month price stability, with inflation averaging just 0.4 percent throughout 2025, and economists saying this consistency marks a significant departure from the volatility that has historically undermined confidence in the local currency.
Low and stable inflation has translated into a steadier ZiG, allowing households and businesses to plan, save and invest with greater certainty, the bank said, adding that slower price increases mean consumers are better able to preserve their purchasing power, while companies can make longer-term decisions without the constant risk of sudden cost escalations.
In a critical policy shift, the Government has pledged not to borrow from the central bank, a practice that in the past fuelled money creation and inflationary pressures. By committing to fiscal discipline and refraining from central bank financing, authorities have removed one of the most common historical triggers of hyperinflation.
“With the Government’s unwavering support and firm commitment not to seek financing from the RBZ, the Bank is better positioned to ensure that all ZiG in circulation is fully backed by reserves. This strengthens its capacity to defend the currency against potential economic shocks,” the RBZ said.
Traditionally, the RBZ has at times supported Government expenditure through direct financing, a process widely referred to as “printing money.”
With the Government’s firm stance against such borrowing, the central bank is now better positioned to ensure that all ZiG in circulation is fully backed by reserves.
This, said the apex bank, strengthens its ability to defend the currency against potential economic shocks and reinforces policy credibility.
Backing this stability is a growing stock of foreign currency reserves, which now stand at US$1.2 billion, equivalent to 1.5 months of import cover. Part of these reserves is held in physical gold, providing an additional buffer against external volatility.
Analysts note that a reserve-backed currency is less vulnerable to destabilising shocks, as the central bank has the capacity to intervene in the market when necessary. With stronger reserves, the RBZ is better placed to meet foreign currency demands for essential imports such as medicines, raw materials and industrial machinery — key inputs for economic growth.
As reserve levels rise and inflation remains subdued, confidence in the ZiG continues to improve. For consumers and businesses alike, the protection of the currency’s value signals a period of sustained stability, offering a foundation for economic recovery and long-term growth.
New Ziana
