Zimbabwe inflation hits single digits for first time since 1997

By Bloomberg News

Zimbabwe’s annual inflation rate fell to single digits for the first time since 1997, a development authorities say is essential to adopting the gold-backed ZiG as the country’s sole currency by 2030.

Inflation slowed to 4.1% in January from 15% last month.

“This marks a historic moment for Zimbabwe,” coming nearly three decades after the country last recorded single-digit inflation in domestic currency, Finance Minister Mthuli Ncube said in an emailed statement on Monday.

The ZiG, short for Zimbabwe Gold, introduced in April 2024 after repeated currency failures and surging inflation, is the nation’s sixth attempt since 2009 to replace the US dollar as the country’s main medium of exchange.

The central bank last year set out a series of benchmarks that must be met before the ZiG can function as the sole currency, including building foreign reserves sufficient to cover three to six months of imports and keeping inflation in single digits.

Foreign assets backing the ZiG rose to $1.2 billion by December from $276 million in April 2024, Ncube said, adding the government would continue to pursue well-coordinated monetary and fiscal policies to entrench price stability.