The Reserve Bank of Zimbabwe (RBZ) reaffirmed its firm monetary policy stance on Thursday, aiming to safeguard the value of the local currency.
During the presentation of the Mid-Term Monetary Policy Statement (MPS), themed “Walking the Talk and Staying the Course,” RBZ Governor Dr. John Mushayavanhu emphasized that the bank continues to receive commendations for maintaining exchange rate stability.
The central bank forecasted that inflation would close the year at around 30%, which would result in a positive real interest rate of 5%. Despite ongoing calls from industry players for reduced borrowing costs, the RBZ decided to keep the Bank Policy Rate at 35%.
Although the elevated interest rate has had adverse effects on productivity—especially by increasing the cost of capital for essential industrial funding—the RBZ insists that such levels are crucial to deter speculative borrowing.
On the issue of banking charges, the MPS reiterated the directive from the February 2025 policy update: bank accounts holding less than US$100 (or the equivalent in ZiG) must be exempt from charges. Furthermore, all Point-of-Sale (POS) transactions under US$5 or the equivalent in ZiG should not incur fees from banks or Payment System Providers (PSPs).
While these exemptions represent progress, they fall short of easing the broader burden on consumers—many of whom pay US$3 per US$100 cash withdrawal. This disproportionately impacts businesses that frequently withdraw large sums for operational needs, increasing overall costs.
Regarding liquidity management, the statement noted that statutory reserve requirements remain between 15% and 30%, depending on deposit types. The RBZ encouraged banks to attract more long-term deposits, which could effectively lower their reserve obligations toward the 15% threshold. These ratios will be revisited only when consistent with the broader monetary strategy.
Despite objections from banks, who argue that the high reserve requirements limit available funds for productive lending, no immediate changes were announced.
The export surrender requirement was also left unchanged at 30%. However, the central bank did not address exporter concerns about delays in receiving the ZiG portion of surrendered earnings—a practice experts believe is meant to protect the local currency from depreciation.
Analysts suggest that withholding export proceeds may signal underlying instability in the ZiG.
Although speculation continues around a potential return to a single local currency by 2030, the latest MPS did not provide specific steps toward that goal. Instead, the RBZ offered reassurances that any transition would be carefully managed.
The de-dollarization process, according to the bank, will be integrated into the National Development Strategy II (NDS2). As chair of the NDS2 Thematic Working Group on Macroeconomic Stability and Financial Deepening, the RBZ is currently conducting consultations on the matter.
“The roadmap will focus on maintaining stability, protecting foreign currency accounts, and preserving the value of USD-linked contracts. Business continuity and predictability will remain key considerations,” the MPS concluded.
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