Economists have criticized the Reserve Bank of Zimbabwe (RBZ)’s 2025 Monetary Policy Statement (MPS), delivered by Governor John Mushayavanhu, arguing that it fails to tackle the country’s core economic challenges.
One of the key issues highlighted was the reduction of the foreign currency retention threshold from 75% to 70%, which, despite widespread calls for an increase, adds further pressure on businesses.
Speaking to <a href="https://businesstimes.co.zw/monetary-policy-fails-to-address-core-economic-challenges-economists/">Business Times</a>, Eddie Cross, an economist and former member of the Monetary Policy Committee said that the MPS neglected to address the fundamental issues facing the economy. Said Cross:
<blockquote>
The Monetary Policy Statement did not address the key fundamentals. It contributes little to stabilizing the ZiG or the broader economy.
The Governor’s remarks blaming retailers for the crisis were uncalled for. We need serious efforts to stabilize the local currency and a structured de-dollarization process.
We have lost significant ground over the past two months, and nothing in this policy will reverse that.
</blockquote>
Economist Tony Hawkins also criticised the MPS, arguing that it lacks credibility and fails to inspire confidence in the ZiG. He said:
<blockquote>
This is yet another attempt to push the market into accepting the ZiG, despite ten months of evidence showing its rejection. The policy lacks both credibility and innovative solutions.
Claims of exchange rate and price stability ring hollow, especially after a month where consumer prices—both in ZiG and US dollars—rose above the annual average for sub-Saharan Africa.
</blockquote>
Hawkins also expressed concern over the excessive growth of the money supply, estimating a 600% increase in reserve money.
Meanwhile, Gift Mugano criticized the MPS as overly punitive, especially towards exporters. Said Mugano:
<blockquote>
The policy effectively weakens exporters by reducing their forex retention threshold. Many are already struggling with working capital shortages due to the previous 75% retention, and this reduction will only worsen their position.
It makes Zimbabwe less competitive globally.
</blockquote>
Economist Malone Gwadu argued that the RBZ is prioritizing the stability of the ZiG at the expense of industry growth. Said Gwadu:
<blockquote>
Policies like high interest rates and tight reserve controls are aimed at preventing excess liquidity and inflation. The central bank’s push to liberalize the forex market is a step in the right direction, but the industry is in distress.
The tight monetary policy must be balanced with measures that support production. Perhaps gradually refining the Targeted Finance Facility (TFF) could help provide relief to struggling industries.
</blockquote>
Prosper Chitambara said the reduction in forex retention is part of the government’s broader de-dollarization strategy and an effort to build foreign currency reserves.
He said reserves are essential, as they provide critical support for the ZiG.
However, Chitambara stressed that Zimbabwe’s current reserves, estimated at around US$500 million, fall significantly short of the US$3 billion needed to cover a minimum three-month import requirement for economic stability. He added:
<blockquote>
While reserve accumulation is essential, this policy effectively acts as an indirect tax on exporters, who would prefer to retain more of their forex earnings.
</blockquote>

Pindula News

Economists say Zimbabwe's new money plan doesn't fix big problems. They don't like reducing how much foreign money businesses can keep. They think the plan won't help the economy. People say the plan hurts exporters and makes Zimbabwe less competitive. Some experts worry the plan puts the currency's stability over helping businesses grow. They think the country needs more foreign money to be stable. But they say the new plan makes it harder for exporters. Experts want more help for struggling industries and smarter money rules.

"Monetary Policy Ineffective In Tackling Key Issues"

The Reserve Bank of Zimbabwe has instructed banks to raise interest rates on savings and time deposits to promote a banking and savings culture in the economy and to remove transaction fees for amounts of US$5 or less (or the equivalent in Zimbabwe Gold, ZiG).
In his 2025 Monetary Policy Statement, RBZ Governor John Mushayavanhu announced these changes as part of a series of new policies.
The interest on ZiG savings accounts has increased from 3.5% to 5%, and from 5% to 7% for time deposits.
For USD savings accounts, the interest rate has gone up from 1% to 2.5%, and from 2.5% to 4% for time deposits. Said Mushayavanhu:
<blockquote>
The Reserve Bank encourages banks to offer depositors more than the stipulated minimum deposit rates, to promote a banking and savings culture in the economy
Depositors should take advantage of these interest rates to place their savings in these interest-bearing savings and time deposit accounts as opposed to noninterest-bearing current accounts.
The Reserve Bank has engaged the Bankers Association of Zimbabwe (BAZ) to ensure that the banking system encourages their depositors to make use of these interest-bearing deposit accounts through awareness campaign programmes and promotions
</blockquote>
The central bank also instructed banks to remove all fees for transactions worth US$5 or less (or the equivalent in ZiG). Said Mushayavanhu:
<blockquote>
Domestic stakeholders consulted by the Reserve Bank bemoaned the current high levels of bank charges obtaining in the banking sector.
The Reserve Bank will continue to ensure that banks strictly adhere to a policy compelling them to exempt from bank charges, all accounts that maintain a balance below US$100 or its equivalent in ZiG.
In addition, Point of Sale (POS) transactions for amounts less than US$5 or its equivalent in ZiG are also exempted from transaction charges, for both banking institutions and Payment System Providers (PSPs).
The Reserve Bank is also working with BAZ and PSPs to come up with mechanisms to minimise bank charges and encourage use of e-cash to promote ZiG. These mechanisms will be finalised and communicated before the end of the first half of 2025.
</blockquote>

The Reserve Bank of Zimbabwe has told banks to pay people more interest on their savings and time deposits. They also said that they can't charge fees for small transactions of $5 or less. The interest rates have gone up for savings accounts and time deposits in Zimbabwe Gold (ZiG) and US dollars. The Governor of the Reserve Bank wants people to use these accounts to save money instead of keeping it in accounts that don't earn interest. They are working with banks to reduce fees and promote the use of e-cash. The goal is to encourage people to save money and use electronic payments.

RBZ Raises Interest Rates On Savings Accounts, Scraps Small Transaction Fees

The Reserve Bank of Zimbabwe has lowered the foreign currency that exporters can keep from 75% to 70%.
This means exporters, like those in mining and agriculture, can now only keep 70% of their earnings in US dollars, with the rest paid in Zimbabwe Gold (ZiG).
Exporters had previously argued that keeping only 25% of their earnings in ZiG was like a tax, and they wanted to keep 85% of their earnings in US dollars to protect their businesses.
However, the RBZ Governor, John Mushayavanhu, decided to take a larger share of the foreign currency to help raise more US dollars and support the Zimbabwean dollar.
Mushayavanhu announced the decision when he presented the bank’s 2025 Monetary Policy Statement, on Thursday, 06 February. He said:
<blockquote>
In order to guarantee continued stability in the interbank foreign exchange market through augmenting the supply of foreign currency, as well as building the critical foreign currency reserves needed to anchor the ZiG, the foreign currency retention level for exporters has been reduced from 75% to 70%, with immediate effect.
This implies that the effective surrender portion of export proceeds has been increased from 25% to 30%.
This review is consistent with the increased use of ZiG in the economy. The additional 5% will ensure that exporters mobilise sufficient ZiG to meet local currency obligations and other expenses, including tax payments, going forward.
</blockquote>
Mushayavanhu said exporters concerned about losing value can deposit any excess ZiG into a special RBZ fund. They will be able to withdraw it at the official exchange rate whenever needed. He said:
<blockquote>
In order to ensure preservation of value, exporters with no immediate use of the ZiG equivalent of the additional 5% of the export surrender proceeds will have an option to invest the funds in a USDDDF at the Reserve Bank which they can withdraw in ZiG on demand, at the prevailing interbank exchange rate on the settlement date.
</blockquote>
However, this is unlikely to please exporters. Most of their costs, like buying materials and paying workers, are in US dollars.
So, when they only get 70% of their earnings in US dollars, they lose money. For large exporters, energy bills— their biggest expense—are also paid in US dollars.

The Reserve Bank of Zimbabwe has reduced the amount of foreign currency exporters can keep from 75% to 70%. This means they can only keep 70% in US dollars and must receive the rest in Zimbabwean dollars. The RBZ Governor made this decision to increase US dollars and support the Zimbabwean dollar. Exporters can deposit excess Zimbabwean dollars in a fund and withdraw when needed. However, most exporters are unhappy as their expenses, like buying materials and paying workers, are in US dollars. This means they lose money when they receive only 70% in US dollars from their export earnings.

RBZ Lowers Exporters' Forex Retention To 70%

The Zimbabwe Congress of Trade Unions (ZCTU) has requested an urgent meeting with Central Bank Governor John Mushayavanhu to discuss the impact of the Monetary Policy Statement (MPS) on workers.
Mushayavanhu presented the MPS on Friday last week and the introduction of a “structured currency”, known as Zimbabwe Gold (ZiG) was the major highlight of the presentation.
ZiG is backed by a composite basket of foreign currency and precious metals (mainly gold) held by the Reserve Bank of Zimbabwe (RBZ).
According to a letter seen by <a href="https://www.newzimbabwe.com/trade-unions-request-urgent-meeting-with-rbz-governor-over-new-zig-currency-confusion/">NewZimbabwe.com</a> dated April 8, 2024, signed by the ZCTU secretary general, Japhet Moyo and addressed to Mushayavanhu, price hikes have eroded the majority of workers’ earnings who are now failing to make ends meet. Part of the letter reads:
<blockquote>
The working people of Zimbabwe have already suffered immensely as wages have failed to keep pace with price hikes.
The situation has worsened rendering it practically impossible for workers across all sectors to earn the current salaries and sustain their families or be able to go to work.
In this vein, the ZCTU is requesting an urgent audience whose agenda would be to discuss and understand the Monetary Policy and its implications on workers.
</blockquote>
According to the RBZ, on Tuesday, 09 April, the ZiG strengthened by 0.2% to 13.53 per US dollar, up from 13.56 per dollar the previous day.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

ZCTU Request Urgent Meeting With RBZ Governor Over Monetary Policy Statement

Finance Minister Mthuli Ncube has been urged to promptly present fiscal measures that complement the monetary policy announced by Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu last week.
The 2024 Monetary Policy Statement outlines key strategies and measures aimed at achieving currency stability. These include the introduction of a structured currency called ZiG, backed by reserves and royalties.
Economist Gift Mugano suggests that Minister Ncube should not delay presenting his mid-term budget review in July or exclusively favour the use of USD over ZiG. He said:
<blockquote>
The Minister of Finance must address the following:
1. Directing all local payments by the GOZ to be in ZiG;
2. Directing all duties, taxes, levies and fees including government services such as passports, birth certificates, death certificates, etc to be in ZiG;
3. Directing fuel stations to accept both ZiG and USD – this must enforced in line with the spirit of the use of a multi-currency regime;
4. Recalibrating the financing model for the public infrastructure with a view to moving away from using cash to long-term finance e.g., diaspora bonds;
5. Setting aside a budget for the liquidation of the 25% export retention surrender requirement view a view to stop the RBZ from printing money;
6. Present a new budget statement in ZiG – this budget must include a supplementary budget with a view to accommodate the exchange movements as the current has been eroded by exchange rate upheavals. This submission is grounded on the fact that the fact that the exchange rate shot from ZWL$6,000/US$1 when the 2024 budget was presented to ZWL$33,882.72 as of 5 April 2024.
7. Downward review of taxes and elimination of some tax heads such as the sugar tax – the current tax regime is causing inflation in USD which means that inflation in ZiG will be massive.
</blockquote>
The annual inflation rate in Zimbabwe has recently risen, reaching an over-one-year high of 55.3% in March 2024. This increase follows a rate of 47.6% in February.
The depreciation of the now-discarded Zimbabwe dollar played a role in this surge. Since the beginning of the year, the Zimbabwe dollar experienced a decline of more than 70% against the US dollar before being replaced by ZiG last week.
The introduction of ZiG marks Zimbabwe’s sixth attempt at creating a new currency since 2008.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Mthuli Ncube Urged To Present Fiscal Measures To Complement Monetary Policy

Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, has said Zimbabwe will always have a local currency even though currently, the US dollar is used for 80% of all commerce in the country.
Speaking <a href="https://www.zimlive.com/zimbabwe-to-keep-local-dollar-despite-losses-revamp-plans-ncube-says/">in an interview</a> Saturday after touring Arenel Foods and Baker’s Inn, in Bulawayo, Ncube also said that fiscal and monetary authorities are working on new plans to revive the currency. He said:
<blockquote>
We will have a domestic currency, and there will always be a domestic currency so there is no way that we cannot have one.
It’s very important to have a domestic currency so that we don’t just rely on foreign currency only for transactions.
We can only have monetary policy as a macro-policy if you have your own domestic currency. We will have a domestic currency.
</blockquote>
On Friday, March 22, the Zimbabwean dollar crossed a notable threshold, falling below 20,000 against the US dollar. This decline occurred after it had previously dropped below the 10,000 level in late January.
The local currency was trading at 20,389 per greenback, indicating a cumulative decline of 70% since the beginning of the year.
Ncube said the monetary policy statement (MPS), which is overdue by two months, will be released soon.
He said the delay in the release of the MPS is due to ongoing consultations with experts within the government and other stakeholders. Said Ncube:
<blockquote>
We are working on some measures, people should be patient, we will release a monetary policy statement in the not-so-distant future which will deal with volatility and weakness in the currency.
Just be patient, we want to make sure that we do it right, undertaking some consultation with various stakeholders in the industry, within Government and international organisations, but also some currency experts that we have consulted.
We want to make sure that we have all the arsenal of knowledge that is needed to produce a lasting solution to the volatility and weakness of the currency.
</blockquote>
Last month, the International Monetary Fund (IMF) urged authorities in Zimbabwe to fully liberalise its exchange rate, warning that the currency’s continuing depreciation could pose a risk to economic growth.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe To Keep Local Currency Despite Losses - Mthuli Ncube

The Reserve Bank of Zimbabwe (RBZ) has cut its policy rate to 150 per cent from 200 per cent following a gradual decline in the rate of inflation since late last year.
Monthly inflation fell to 1.1 percent in January 2023 from 2.4 percent in December 2022, while yearly inflation fell to 229.8 percent from 243.8 percent.
In his 2023 Monetary Policy Statement issued on Thursday, 02 February, RBZ Governor John Mangudya said:
<blockquote>
The moderation in interest rates is important and necessitated by the downward trend in month-on-month inflation since the last quarter of 2022. The Bank will continue its tight monetary policy stance.
</blockquote>
Mangudya also increased export retentions to 75 percent across all sectors, including firms listed on the Victoria Falls Stock Exchange (VFEX).
He also announced the upward review of the export of foreign currency cash and gold coins from US$5 000 to US$10 000.
The maximum amount of local currency notes and coins that may be taken out of the country has been capped at an equivalent of US$1 000 at the prevailing interbank exchange rate.

RBZ Cuts Policy Rate To 150 Percent After Inflation Falls

Captains of industry and commerce have urged the Reserve Bank of Zimbabwe (RBZ) to lower its bank policy interest rates downwards to between 80 and 100 per cent from 200 per cent.
They say this will enable businesses to have access to affordable financing.
Zimbabwe National Chamber of Commerce (ZNCC) chief executive officer Christopher Mugaga said companies are now being forced to borrow in United States dollars due to high-interest rates, which he said threatens their viability. Said Mugaga:
<blockquote>
In the upcoming monetary policy statement, we expect interest rates to be reviewed downwards to margins between 80 and 100 percent this is because as private sector we understand that the rate of inflation is still a threat to the overall macro-economic stability, but having it come down to those levels will at least give us a breathing space.
Right now, most of the companies are borrowing in US dollars and it’s not sustainable at all.
</blockquote>
RBZ governor John Mangudya is expected to present this year’s monetary policy statement next month.
In its third quarter of 2022 business and economic intelligence report, the Confederation of Zimbabwe Industries (CZI) said:
<blockquote>
… an interest rate of 200 percent compounded monthly effectively eliminated ZWL$ borrowing, as businesses could not afford such high borrowing costs.
While speculative borrowing was reduced (which also helped contain the growth of money supply), the policy virtually eliminated borrowing in local currency as a way of finance and reduced industry expansion prospects.
</blockquote>
Persistence Gwanyanya, a member of the RBZ Monetary Policy Committee said:
<blockquote>
Certainly, the forthcoming monetary policy will be presented before the end of next month but a date has not been set as yet.
One of the expectations from industry and commerce is the downward review of interest rates from the current levels.
In December, as the MPC we postponed the review of the interest rates on account that there should be sustained currency and inflation stability, if sustained stability is there by the time the monetary policy statement is presented, the interest rates will be reviewed downwards.
</blockquote>
| <a href="https://www.herald.co.zw/industry-wants-interest-rates-reduced/">The Herald</a>

Captains Of Industry Expect RBZ To Reduce Interest Rates

The RBZ has released the mid-term monetary statement which is centred on Fostering Price Stability. The statement touches on a few things like the introduction and the support measures of the forex auction trading system among other issues.
Download the full 58 paged document here. <a href="https://t792ae.c2.acecdn.net/wp-content/uploads/2020/08/Monetary-Policy-Statement-21-August-2020.pdf">Monetary-Policy-Statement-21-August-2020</a>

DOWNLOAD: Mid-Term Monetary Policy Statement

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya presents the 2019 Monetary Policy Statement today. Watch the livestream below:
<div class="fb-video" data-allowfullscreen="true" data-href="https://www.facebook.com/openparlyzw/videos/2236266983102187/"></div>
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