ZiG Strengthens Briefly Before Sliding Again as Currency Woes Persist

Zimbabwe’s new currency, the ZiG, enjoyed a rare moment of strength on Tuesday, 21 May — its first gain in nearly a month — before resuming its downward trend, raising fresh doubts about its long-term stability.

The currency appreciated slightly to 26.8853 per U.S. dollar from 26.9786 the previous day, ending a steady losing streak that had stretched since 25 April. But the rebound didn’t last, and the ZiG slipped again, edging closer to the psychologically important 27-per-dollar mark — a threshold the Reserve Bank of Zimbabwe (RBZ) seems eager to avoid breaching.

The ZiG has shed around 50% of its value since it was introduced, mainly due to a sharp 43% devaluation on 26 September 2024, when the RBZ reset the rate from 13.9 to 25 per dollar.

Still, there’s been a silver lining this year. In 2025, the currency had only lost about 4%, a surprisingly stable run by Zimbabwean standards. Economists credit this to the RBZ’s strict liquidity controls, including high interest rates and tight limits on money supply.

But experts are warning that simply making the ZiG scarce to keep its value up won’t work forever. For the currency to survive, they say the RBZ must create genuine demand.

One way to do that could be by making people pay all government taxes, royalties, and fees in ZiG — right now, only half are required to be paid in local currency. This was a strategy previously used in 2022 under former central bank chief John Mangudya, and it temporarily helped stabilise the Zimbabwe dollar.

However, that stability didn’t last once more money entered the system, a reminder that temporary fixes won’t solve deeper economic issues.

Analysts also say it’s time for the RBZ to reduce the U.S. dollar’s grip on the economy and rebuild trust in the ZiG. Measures like Statutory Instrument 34 of 2025, which allows businesses to set prices using market rates, are seen as steps in the right direction — but only if followed by broader reforms.