By April 2026, reserve funds in Zimbabwe increased by 51 percent compared to the previous year. Monthly growth reached 10 percent – a pace that would add up to over 200 percent if simply repeated rather than amplified. The broad money supply, M3, grew 46 percent year-on-year over the same period, the fastest since the current central bank governor took office. Stripping away the technical vocabulary, one clear fact remains: the Central Bank of Zimbabwe has rediscovered the inflationary printing press.
This isn’t really a column about inflation statistics. This is a column about what these statistics are for. Money is never neutral, especially not in a country that is trying to introduce a national currency for the sixth time since 2008. Any increase in the money supply allows someone to spend money at someone else’s expense before prices adjust. Read correctly, Zimbabwe’s currency data is also a map of political power development over the next four years and leads straight back to State House.
The Reserve Bank of Zimbabwe has had two governors since 2014, both named John. Under John Mangudya, reserve money became synonymous with panic. As the exchange rate soared in 2022, President Emmerson Mnangagwa suspended all bank loans nationwide, blaming currency speculators, before intense lobbying overturned the order weeks later.
John Mushayavanhu arrived in 2024 with the promise of something different: a gold-backed currency – the ZiG – and a pledge to stop lending to the government. It worked for a while. Annual ZiG inflation fell from over 95 percent in mid-2025 to about 4 percent in January 2026, foreign reserves reached $1.2 billion, and the IMF rewarded the efforts with a staff-monitored program. Then came April and the fastest money growth of his term. The pattern that Zimbabweans have observed since 2007 – reform, followed by credibility, followed by backsliding – appears to be going according to plan again.
Reserve money can only be expanded in two ways: the central bank creates it directly or the government borrows it, monetizing a budget gap that cannot be covered by taxes and bonds. The Reserve Bank has insisted for two years that the second channel be closed; Mushayavanhu says the government has not taken loans from his institution since April 2024. If that’s true and the reserve money supply still increases by half within a year, the money comes out of the central bank’s balance sheet in other ways: new deposit facilities, foreign exchange operations, banknote issuance. The specific mechanism is less important than the fact that it allows the government to comply with the letter of “not lending to the Treasury” while the money supply grows exactly as if it had been lending anyway. Officials spent 2025 describing that growth as a tame 3.6 percent per month; Over a year, this is already over 52 percent and hardly differs from the “alarming” number that is now making headlines.
The distortion is most evident in the loan price. On June 15, the Monetary Policy Committee cut its key interest rate from 35 to 30 percent to support growth, even as its own money supply data accelerated. But ordinary contractors report taking out loans of up to 50 percent a year, a rate cut that has almost no impact on what real borrowers actually pay. Longer-term loans are worse: Zimbabwe still cannot offer 25-year mortgages, and real estate industry figures say gaps, lack of permits or construction capacity are now the binding barrier to the real estate sector.
Banks will not guarantee a 20-year outlook for such a young currency. In the Austrian reading, a monetary interest rate acts as a price that coordinates real savings with investment horizons, and no bank can price a horizon at which the currency itself may not be viable. Push that price down by decree while the money supply increases and the exchange rate no longer conveys honest information, a textbook example of malinvestment that Zimbabwe has experienced in every currency cycle in some form since dollarization. Inflation has already started drifting in the wrong direction, from 4.4 percent in May to 4.7 percent in June – still in the single digits, but moving in the direction that sustained monetary growth will eventually emerge. From here, the number worth watching is not headline inflation, but the gap between official and parallel exchange rates, which historically moves first.
Exporters are feeling the same instability from a different angle. Under Zimbabwe’s mandatory surrender rule, exporters convert 30 percent of foreign proceeds into ZiG through the central bank in exchange for a promised local payment. Platinum producers alone owe more than $228 million in unpaid conversions – $100 million to Valterra Platinum, $78 million to Zimplats. The Treasury Department attributes the backlog to its own revenue constraints, and executives warn the figure could reach $300 million and put nearly a third of formal mining jobs at risk.
Zambia abolished an identical requirement in 2023 rather than allowing it to become a permanent, involuntary loan from miners to the state; Instead, Zimbabwe increased its rate from 25 to 30 percent. The same institutional habit was even more evident in April when a Harare court overturned the freezing of an RBZ account as “arbitrary and irrational” after learning that the bank had been quietly borrowing from the same counterparty for its own needs for years. Apparently, claims on the Central Bank of Zimbabwe are paid on a schedule controlled solely by the bank.
Sugar producer Hippo Valley shows that the same surrender rule can backfire, even if it is followed in full and in a timely manner. The export volume has more than doubled this year to 92,518 tons. However, since local sales were already largely in U.S. dollars, giving 30 percent of export earnings to ZiG turned these additional sales into a net loss once the costs of sugarcane were covered. Rather, a policy aimed at rewarding the acquisition of foreign exchange consists of teaching exporters to earn less of it.
This is where the monetary and the political meet. Zimbabwe’s draft constitutional amendment No. 3, which extends the term of office of the president and parliament from five to seven years and changes the way the president is elected, has passed parliament and awaits Mnangagwa’s approval: the centerpiece of an “Agenda 2030” that would keep the 83-year-old president in office two years beyond his current constitutional limit. The maneuver has split the ruling party into what political analysts call open factions, and the International Crisis Group warned of a real risk of political violence because of the presidency’s “unfettered power to plunder state resources.”
This fractional management is not free and it runs on a schedule that has nothing to do with crops or export prices. A government that has staked its credibility on not openly borrowing from its own central bank, and that cannot plausibly raise money through a visible tax increase in the midst of a succession crisis, has exactly one financing tool left that can be used without asking anyone’s permission: the printing press itself.
I cannot prove that the money boost in April specifically financed factional politics, and I would like to be careful not to portray a connection as causality. But a year of hard-fought inflation control giving way to the fastest monetary growth of the current governor’s term in office precisely in the months when the battle for succession becomes most dangerous is exactly the kind of coincidence that Austrian monetary theory has never treated as a coincidence. In Mises’ own view, inflation remains a taxation that requires neither legislative nor electoral approval. If the change takes effect, funding pressures are expected to continue with every vote the new calendar requires. If it is blocked by the courts or factions, expect the factional struggle to intensify instead, which will not be cheaper to deal with in the short term. Either way, the pressure on the money supply is not letting up.
To be fair, real progress is real. Single-digit inflation, nearly six-fold reserve coverage and nearly 5 percent GDP growth are not nothing after a generation without either. Some of April’s growth may simply be due to growing confidence driving real demand for ZiG, and the same month saw the release of a new series of banknotes that, on their own, can distort a single month’s reading. One data point is not a trend. But a central bank that cuts interest rates to accelerate money supply growth, leaves exporters waiting for hundreds of millions of unpaid conversions and extends legacy debt until 2042 is not a picture of discipline either. Both things happen at the same time, because within a governing party there is an argument about who inherits both.
Two governors, both named John. A printing press, dusted off and back in operation, under the name that the currency currently bears in this decade. Whoever governs Zimbabwe after Mnangagwa, and whenever this question is finally settled, the answer will essentially be financed in the one currency that will never have to face a voter or a parliament. This is the path that lies ahead of us. Like the five streets before it, it runs directly through the printing press.
https://mises.org/mises-wire/zimbabwe-has-no-long-money
