Harare – The Zimbabwe Gold (ZiG) currency has continued its downward trend against the US dollar, recording losses for five straight days. The currency dropped from a rate of 25.2836 last Friday to 25.2842 on Monday, eventually reaching 25.3326 by Friday.
The weakening of ZiG comes amid the distribution of civil servants’ bonuses, a move that typically places increased pressure on the local currency. As employees convert their earnings to US dollars—a preferred store of value due to its stability—the demand for foreign currency has spiked, potentially sustaining pressure on ZiG throughout the festive season.
The current figures, however, remain significantly stronger than the record low of 28.6829 recorded on 1 November, following the local currency’s devaluation from 14:1 to approximately 25:1 on 27 September.
Market observers note that despite the continued weakening of ZiG on official platforms, black market rates appear stable, fluctuating between 35 and 40 to the US dollar. Nonetheless, some online platforms tracking exchange rates have not provided updates in the past week, raising concerns about transparency in the parallel market.
Economic analysts warn that the coming weeks could see further fluctuations in the local currency as civil servants and other citizens rush to secure US dollars ahead of holiday spending. In addition, structural challenges in the economy, including a reliance on imports and the dominance of the informal market, continue to undermine the stability of ZiG.
Efforts to stabilise the currency remain a critical focus for policymakers, though the dual pressures of increased holiday spending and bonus payments pose a significant challenge to achieving exchange rate stability in the short term.
While the black market provides a fallback for some, its volatility and unpredictability highlight the need for broader economic reforms to restore confidence in the local currency. For now, all eyes remain on the Reserve Bank of Zimbabwe for potential interventions as the festive season approaches.