Based on the Quarterly Snapshot on Recent Monetary, Currency, Price, and Financial Developments as at 31 December 2025 from the Reserve Bank of Zimbabwe (RBZ), here is an analysis of the key macroeconomic indicators and financial trends for 2025:
1. Inflation and Price Stability
The RBZ reports a significant success in the disinflation path during 2025, primarily driven by a tight monetary policy stance:
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ZiG Annual Inflation: Ended the year at 15%, notably lower than the original target of 30%.
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Month-on-Month Stability: Local currency inflation remained anchored, averaging 0.4% from February through December 2025.
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USD Inflation: As of December 2025, the annual inflation rate for USD-priced goods stood at 12.39%, with monthly movement almost flat at 0.01%.
2. Exchange Rate Developments
The exchange rate showed marked stability throughout 2025 under the Willing-Buyer Willing-Seller (WBWS) arrangement:
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Interbank Rate: The interbank exchange rate closed the year at ZiG25.98 per US dollar, having oscillated around the ZiG 26 mark for most of the year.
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Parallel Market: The premium between the official and parallel market rates was successfully contained below 20% for the greater part of 2025.
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Market Interventions: Since April 2024, the RBZ has injected approximately US$1.34 billion into the foreign exchange market to ensure smooth functioning and liquidity.
3. Monetary Aggregates and Money Supply
The “Back-to-Basics” strategy focused on disciplined money supply management:
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Reserve Money: Growth was kept under strict check, amounting to ZiG 5.3 billion by year-end.
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Broad Money (M3): The growth of the local currency component of broad money fell from over 10% in late 2024 to an average of 2% in 2025.
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Central Bank Financing: There was zero central bank financing of Government expenditure, a critical factor in curbing inflationary pressure.
4. External Sector Performance
The country’s foreign currency generation capacity remained resilient:
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Foreign Currency Receipts: Totaled US$16.2 billion in 2025, a 21.8% increase from US$13.3 billion in 2024.
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Major Contributors: Export earnings (59.7%), loan proceeds (14.8%), and Diaspora remittances (13.5%).
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Trade Balance: The country is expected to record a strong current account surplus of over US$1.0 billion for 2025, doubling the US$501 million recorded in the previous year.
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International Reserves: Foreign currency reserves reached US$1.2 billion (representing 1.5 months of import cover). These reserves provide a 6x cover for the stock of ZiG reserve money.
5. Financial Sector and Banking
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Lending Trends: The share of ZiG-denominated loans to total loans was 15.55% in December 2025.
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Loan-to-Deposit Ratio: The ZiG loan-to-deposit ratio improved from below 30% in early 2024 to 38% by December 2025.
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Fintech Innovation: The RBZ noted a rapid advancement in financial technology and is working on interagency arrangements to assess the impact of Fintech on financial stability.
6. Outlook and Strategic Goals for 2026
The report sets the stage for a transition toward a mono-currency system, provided specific “conditions precedent” are met:
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Inflation Target: The goal is to reach single-digit annual inflation by the end of 2026.
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Reserve Accumulation: High priority remains on further replenishing external buffers to at least 3 months of import cover to anchor the local currency permanently.
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GDP Growth: Economic growth is projected at 6% for 2025/2026, supported by agricultural recovery and stable macroeconomic conditions.
