• Zimbabwe’s annual inflation rate fell to 4.1% in January 2026, dropping below 10% for the first time since 1997.
• Authorities view the slowdown as a prerequisite for adopting the gold-backed Zimbabwe Gold (ZiG) currency as the sole legal tender by 2030.
• Foreign exchange reserves backing the ZiG rose to more than $1.2 billion from about $276 million since April 2024.

Zimbabwe’s year-on-year monthly inflation rate fell below the 10% threshold for the first time since 1997, a milestone that authorities consider critical to adopting the gold-backed Zimbabwe Gold (ZiG) currency as the country’s sole legal tender by 2030.

Inflation slowed to 4.1% in January 2026 from 15% in December 2025, the Ministry of Finance said in a statement released on Monday, January 26.

“This marks a crucial shift toward lasting macroeconomic stability,” the ministry said, attributing the improvement to “strict fiscal discipline and coordinated monetary policy with the Reserve Bank of Zimbabwe since the introduction of the ZiG in April 2024.”

Foreign exchange reserves backing the ZiG increased to more than $1.2 billion from about $276 million in April 2024, the ministry added.

The ZiG introduction represents the country’s sixth attempt since 2009 to replace the U.S. dollar as the dominant currency.

Two Conditions for Adopting the ZiG as Sole Currency

In 2025, the Reserve Bank of Zimbabwe set two key conditions before the ZiG can function as the sole currency. The central bank requires the accumulation of foreign exchange reserves sufficient to cover three to six months of imports and the maintenance of inflation below 10%.

Zimbabwe has faced a severe economic crisis since the land reform launched in the late 1990s under former president Robert Mugabe. The reform expelled about 4,500 large white commercial farmers and redistributed land to Black farmers, triggering a sharp collapse in agricultural output and a deep economic downturn. Harare subsequently suspended repayment of nearly $13 billion owed to the World Bank, the African Development Bank, the European Investment Bank, and Paris Club creditors.

The expropriation of white farmers also discouraged foreign investment and sharply reduced exports. These pressures pushed Mugabe to finance spending through large-scale money printing, which triggered a prolonged period of hyperinflation and ultimately forced the abandonment of the Zimbabwean dollar in 2009 in favor of the U.S. dollar.

This article was initially published in French by Walid Kéfi

Adapted in English by Ange J.A de BERRY QUENUM