The real test for Zimbabwe’s currency, the Zimbabwe Gold(ZiG), has now begun after the government removed exchange controls allowing business to charge prices above the official exchange rate.
Although the central bank argued that the market was determining the exchange rate, Statutory Instrument 81A of 2024 laid down penalties for businesses that priced their goods above the official exchange rate.
The penalties were as high as ZiG200 000, or an amount equal to the foreign currency charged, whichever was greater.
Now these restrictions have been lifted allowing the ZiG to trade freely.
The official exchange rate today is ZiG26.80 to the United States dollar but according to Zimpricecheck, the dollar is trading at between ZiG35 and ZiG40, but these rates are just indicative rates. One might not get them on the real market.
Some market analysts have been urging the government to abandon the ZiG arguing that it has failed as the market is now dominated by the US dollar and the informal market is rejecting the ZiG.
The central bank on the other hand says it is confident the ZiG will stand its ground as it has been stable over the past seven months. There is no going back as the country intends to end multiple currency trading by 2030.
The central bank also says its foreign currency reserves to back the local currency have risen from $276 million in April 2024 to $629 million at the end of March 2025.
The reserves are, however, far from meeting the country’s import needs. Import cover is usually supposed to be a minimum of three months of imports which would set this at reserves of above $2.7 billion.
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