By Jabulani Simplisio Chibaya
HARARE – THE Reserve Bank of Zimbabwe’s Q4 2025 Monetary, Currency and Financial Snapshot reads, at first glance, like a long-awaited moment of vindication. Inflation is sharply lower, the exchange rate is steady, foreign reserves are rising and the financial sector is calm. After years in which statistics themselves were treated with suspicion, the numbers now appear coherent, internally consistent, and most importantly believable.
But as Austrian economist Ludwig von Mises famously warned, “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system.” That warning is particularly relevant for Zimbabwe, where past stability was often purchased through delayed adjustment rather than genuine correction.
The real significance of Q4 2025 lies not in the headline improvements themselves, but in how they were achieved, what assumptions they rest on and whether they can survive political, fiscal, and external pressure in 2026 and beyond.
Disinflation: A Monetary Event, Not a Statistical Trick
The snapshot confirms that annual ZiG inflation fell to 15% by December 2025, while month-on-month inflation averaged around 0.4% for most of the year. This was not an accounting illusion. Reserve money growth was tightly contained at ZiG 5.3 billion, and, crucially, central bank financing of government spending was nil.
From an Austrian perspective, this is decisive. Inflation, as Murray Rothbard argued, is not primarily about rising prices but about the expansion of money and credit. As Rothbard wrote, “Inflation is an increase in the supply of money and credit. Rising prices are only the consequence.” Zimbabwe’s experience in 2025 fits this description precisely. When money creation slowed, prices followed.
What makes Q4 2025 different from past disinflation episodes is that restraint came not from exhaustion or collapse, but from deliberate policy choice. This matters because confidence grows not when inflation falls once, but when people believe it will not be reignited tomorrow.
Exchange Rate Stability: Orderly Market or Managed Truce?
The exchange rate figures in the snapshot are among the most striking. The interbank rate hovered around ZiG 26 per US dollar, with the parallel market premium contained below 20% for most of the year. The Real Effective Exchange Rate remained broadly aligned, suggesting that the currency was not wildly overvalued.
Yet Austrian economists consistently caution against confusing price stability with price discovery. As Friedrich Hayek noted, “Prices are not just numbers; they are signals wrapped in incentives.” In Zimbabwe’s case, the snapshot reveals that exchange rate calm has been supported by US$1.34 billion in RBZ foreign exchange interventions since April 2024.
This does not negate the progress, but it qualifies it. Stability here resembles a managed equilibrium, where volatility is suppressed while structural imbalances are gradually worked off. The question for 2026 is whether this equilibrium can persist with less administrative support, not more.
Reserves: Confidence Backing, But Not Yet a Fortress
Foreign currency reserves reached US$1.2 billion by December 2025, covering ZiG reserve money nearly six times and equating to 1.5 months of import cover. In Austrian terms, reserves matter because they constrain discretion. They limit how far policymakers can drift from discipline before markets respond.
However, Joseph Salerno, a modern Austrian economist, cautions that “Credibility is not created by ratios alone, but by the demonstrated willingness of policymakers to accept short-term pain to avoid long-term collapse.” Zimbabwe’s reserves are improving, but they are still thin enough to be tested by shocks, commodity downturns, or fiscal slippage.
This means confidence remains conditional. The ZiG is increasingly accepted not because it is unquestioned, but because restraint has been consistently observed so far.
Financial Sector Calm: Healing or Hesitation?
The snapshot reports a sound and resilient financial sector, with low non-performing loans, stable payment systems, and moderate loan growth. ZiG loans now account for about 15.5% of total lending, while ZiG deposits continue to rise.
Austrians would interpret this cautiously. As Jesús Huerta de Soto has written, “Periods following monetary disorder are often characterised by excessive caution, not excessive risk.” The calm in Zimbabwe’s banking sector reflects a system recovering from trauma. Credit is expanding slowly not because opportunity is absent, but because trust is still being rebuilt.
This is not weakness; it is healing. But it also means growth remains fragile and sensitive to policy missteps.
The Austrian Warning Beneath the Snapshot
Perhaps the most important Austrian insight is this: stability achieved through restraint is sustainable; stability achieved through control is temporary.
As Ludwig von Mises observed, “The task of economic policy is not to create wealth but to establish an institutional framework in which individuals can pursue it.” The Q4 2025 snapshot suggests Zimbabwe is, for the first time in years, moving closer to such a framework, one defined by predictable money, fiscal restraint, and clearer rules.
But the snapshot also shows how narrow that path remains. Uncovered foreign currency demand still spikes, reserves are improving but not ample, and exchange-rate stability still depends partly on intervention.
What Q4 2025 Tells Us About 2026
The underlying message of the snapshot is not triumph, but conditional success. Inflation is falling because money creation has stopped accelerating. The exchange rate is stable because confidence has not been betrayed. The financial sector is calm because policy has been boring.
As Peter Schiff, bluntly puts it, “You don’t fix a problem by pretending it’s gone. You fix it by removing the cause.” Zimbabwe removed one major cause in 2025: unchecked monetary expansion.
Whether it resists reintroducing it in 2026 will determine everything.
Final Thought: A Snapshot That Demands Discipline
Q4 2025 will likely be remembered as the quarter in which Zimbabwe proved to itself more than to anyone else that stability is possible. But Austrian economics reminds us that possibility is not permanence.
The snapshot is not a destination. It is a mirror.
And what it reflects is an economy balanced carefully on credibility where every future decision will matter more than every past mistake.
Jabulani Simplisio Chibaya is a Data and AI Consultant specializing in data science, artificial intelligence, blockchain, and cryptocurrency innovation. A seasoned conference speaker, he also writes on the intersection of technology, regulation, and economic development. Contact: Cell: +263 778 921 881, Email: simplisiochibaya22@gmail.com, LinkedIn: https://www.linkedin.com/in/jabulani-simplisio-chibaya
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