Tinotenda Hove

The Zimbabwean currency, ZiG (Zimbabwe Gold), now ranks as the second worst-performing currency in the world, according to Professor Steve Hanke’s CurrencyWatchlist.

ZiG has experienced a steep depreciation of 37 percent against the U.S. dollar over the past year. This dramatic decline comes amid persistent inflation pressures in Zimbabwe, which have been exacerbated by shrinking local production and the resulting decrease in exports. The country’s heavy reliance on imports, coupled with diminishing capacity utilization, has further contributed to economic instability.

Professor Steve Hanke has been vocal about the situation, publicly urging the administration of President Emmerson Dambudzo Mnangagwa to adopt full dollarization. “The best course of action for Zimbabwe is to fully dollarize its economy,” Hanke has said, highlighting the significant challenges posed by the ongoing currency depreciation.

However, recent data from the Zimbabwe National Statistics Agency (ZimStat) offers a more optimistic outlook. According to the latest figures, the month-on-month inflation rate for ZiG has dropped significantly, a trend that mirrors the inflation rate of the U.S. dollar. These developments have led to a reduction in the weighted inflation rate, sparking hopes for a more stable and predictable economic future.

ZimStat’s Consumer Price Index (CPI) data for February 2025 shows a slight increase, rising to 184.60 from 183.76 in January. Despite this, the month-on-month inflation rate dropped to 0.5 percent, a sharp decrease from the 10.5 percent recorded in January. This decline offers a glimmer of hope for the Zimbabwean economy as it works to stabilize its currency and inflation rates.