Zimbabwe moves to rebuild local bond market after ZiG chaos

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The authorities intend to 'make the ZiG a store of value, as opposed to just a transactional currency,' central bank Governor John Mushayavanhu said

Zimbabwe is taking steps to rebuild its domestic bond market after stabilising the gold-backed ZiG currency and bringing inflation down to single digits following years of economic turmoil.

The authorities intend to “make the ZiG a store of value, as opposed to just a transactional currency,” central bank Governor John Mushayavanhu said in an interview in Johannesburg on Thursday. “It’s time for us now to start looking at developing a short-term yield curve for the ZiG.”

Zimbabwe Gold, introduced in April 2024 to replace the Zimbabwean dollar, is the southern African nation’s sixth attempt to establish a functional currency.

“We have established the short-term yield which you would get, but what is now required is to elongate that curve,” Mushayavanhu said. “You are going to be seeing government instruments, Treasury bonds, coming into the market to further elongate the yield curve.”

Zimbabwe is also studying yield curves in other local-currency bond markets in the region and among its trading partners to assess how its market compares, the governor said. South Africa, Namibia and Zambia are neighbouring countries with established domestic debt markets.

The ZiG has weakened almost 3% against the dollar in 2026 despite the fallout from the Middle East war that has pressured frontier-market currencies from Uganda’s shilling to Egypt’s pound. The central bank spent $1.35 billion in the first nine months of the year intervening in the foreign-exchange market, potentially preventing a steeper decline in the ZiG, Mushayavanhu said.

The country’s reserves have risen to more than $2 billion, sufficient to buy back all of the ZiG32 billion in circulation, implying an exchange rate of about ZiG18 per dollar, the governor said. The currency traded at 26.43 per dollar on Thursday.

“When I look at the exchange rate which is between 25 and 27 per dollar, I’m actually seeing an undervalued ZiG,” the governor said.

The authorities intend to ‘make the ZiG a store of value, as opposed to…

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