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.<\/p>\n\n\n\n
The authorities intend to \u201cmake the ZiG a store of value, as opposed to just a transactional currency,\u201d central bank Governor John Mushayavanhu said in an interview in Johannesburg on Thursday. <\/p>\n\n\n\n
\u201cIt\u2019s time for us now to start looking at developing a short-term yield curve for the ZiG.\u201d\u00a0<\/p>\n\n\n\n
Zimbabwe Gold, introduced in April 2024 to replace the Zimbabwean dollar, is the southern African nation\u2019s sixth attempt to establish a functional currency.<\/p>\n\n\n\n
The central bank plans to extend its ZiG-Denominated Term Deposit Facility to longer maturities after successfully introducing 30- and 90-day tenors. <\/p>\n\n\n\n
The instruments yield 8% and 11%, respectively, and were fully subscribed at auction. The securities were priced on 9 September, according to data on the monetary authority\u2019s website.<\/p>\n\n\n\n
\u201cWe have established the short-term yield which you would get, but what is now required is to elongate that curve,\u201d Mushayavanhu said.<\/p>\n\n\n\n
\u201cYou are going to be seeing government instruments, Treasury bonds, coming into the market to further elongate the yield curve.\u201d\u00a0<\/p>\n\n\n\n
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. <\/p>\n\n\n\n
South Africa, Namibia and Zambia are neighbouring countries with established domestic debt markets.<\/p>\n\n\n\n
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\u2019s shilling to Egypt\u2019s pound. <\/p>\n\n\n\n
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.<\/p>\n\n\n\n
The country\u2019s 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.<\/p>\n\n\n\n
The currency traded at 26.43 per dollar on Thursday.<\/p>\n\n\n\n
\u201cWhen I look at the exchange rate, which is between 25 and 27 per dollar, I\u2019m actually seeing an undervalued ZiG,\u201d the governor said. <\/p>\n\n\n\n
\u201cThe difference between 18 and 25 or 26 or 27 per dollar to me is a premium that should not be there.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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