HARARE – Zimbabwe’s broad money (M3) supply rose by 6.75% in March 2026 to ZiG119.84 billion, driven by a sharp increase in both local and foreign currency deposits.
Latest figures contained in the Reserve Bank of Zimbabwe monetary and economic review show that broad money (M3), which comprises both local and foreign currency components, rose by ZiG7.57 billion from ZiG112.26 billion recorded in February 2026.
The central bank said the increase was largely underpinned by growth in both currency components, with the local currency segment registering the fastest expansion during the month under review.
“The increase in broad money largely reflected a growth of ZiG5.29 billion in the foreign currency component, from ZiG91.50 billion recorded in January to ZiG96.79 billion in February 2026. The local currency component increased by ZiG2.29 billion from ZiG20.77 billion to ZiG23.05 billion,” said the central bank.
The RBZ noted that the local currency component of broad money expanded by 11%, outpacing the 5.78% growth recorded in foreign currency deposits, an indication of increasing circulation and usage of the ZiG within the domestic economy.
Economic analyst Prosper Chitambara said the significant rise in the local currency component was an important development for monetary authorities seeking to strengthen confidence in the domestic currency and improve monetary policy transmission mechanisms.
He said the growth suggested that more economic agents were increasingly willing to hold and transact in local currency, which could help reduce excessive dollarisation pressures that have dominated Zimbabwe’s financial system over the years.
“The increase in the local currency component of broad money is significant because it points to improving acceptability and usage of the ZiG in domestic transactions. A stronger local currency presence in the economy enhances the effectiveness of monetary policy tools and gives authorities greater room to manage liquidity and inflation,” Chitambara said.
He, however, cautioned that sustained confidence in the local currency would largely depend on continued exchange rate stability, inflation containment and fiscal discipline.
“If the growth in local currency liquidity is not matched by productivity and economic output, there is always a risk of inflationary pressures emerging. Authorities therefore need to ensure that money supply growth remains aligned with broader macroeconomic fundamentals,” he added.
Despite the rise in local currency balances, foreign currency deposits continued to dominate Zimbabwe’s money supply structure, accounting for 80.77% of total broad money stock, highlighting the economy’s continued reliance on the United States dollar and other foreign currencies.
Local currency deposits accounted for 18.67% of total money supply, while local currency notes and coins in circulation contributed 0.13%.
On an annual basis, broad money expanded by 42.99% from ZiG83.81 billion recorded in March 2025, reflecting sustained liquidity growth across the economy.
The RBZ attributed the annual increase to strong expansions in both foreign and local currency components, which rose by 40.38% and 55.08% respectively.
Meanwhile, the banking sector’s net credit to Government increased by ZiG2.45 billion, representing a 3.78% rise to ZiG67.07 billion, mainly driven by a drawdown in Government deposits held by banks. Government deposits declined by ZiG3.57 billion from ZiG64.62 billion recorded in February, reflecting increased fiscal expenditure during the period under review.
Credit extended to the private sector also registered steady growth, rising 3.89% from ZiG70.29 billion to ZiG73.03 billion in March 2026.
The RBZ said lending remained concentrated in key productive and consumption sectors, with households receiving the largest share at 27.77%, followed by agriculture at 15.60%, distribution at 13.07% and manufacturing at 13.01%. The mining sector accounted for 8.49% of outstanding private sector credit.
Most of the credit advanced to businesses and consumers was utilised for recurrent expenditure, which accounted for 34.80%, while 21.77% went towards inventory build-up and 18.46% financed fixed capital investments.
Chitambara said the simultaneous growth in both local and foreign currency liquidity reflects expanding economic activity, improved banking sector intermediation and growing transactional demand across the economy, although the dominance of foreign currency deposits continues to underline Zimbabwe’s long-standing dual-currency dynamics.
