Table of Contents
The Reserve Bank of Zimbabwe (RBZ) has maintained its tight monetary policy stance in its 2025 Mid-Term Monetary Policy Review, projecting economic growth of 6% this year, up from 1.7% in 2024.
The review, released under Section 46 of the Reserve Bank Act [Chapter 22:15], highlights continued efforts by the central bank to anchor price, currency, and exchange rate stability following the introduction of the Zimbabwe Gold (ZiG) currency in April 2024.
According to the RBZ, month-on-month ZiG inflation averaged 0.6% between February and July 2025. Annual ZiG inflation, recorded at 95.8% in July 2025, is expected to moderate significantly and end the year at around 30%, owing to base effects from October 2024.
The ZiG/US$ exchange rate remained relatively stable, closing June at ZiG26.95 per US dollar. The exchange rate premium has remained below 30% since January 2025.
Foreign Currency Inflows and Reserves Increase
Foreign currency inflows for the first half of 2025 amounted to US$7.3 billion, up from US$5.9 billion during the same period in 2024. This increase was mainly attributed to export earnings and international remittances.
Foreign currency reserves grew by more than 150%, from US$285 million in April 2024 to over US$730 million in June 2025.
Increased Usage of ZiG
The proportion of ZiG in electronic transactions rose from 26% in April 2024 to over 40% in June 2025. Banks are now required to hold at least 3% of ZiG deposits as physical cash to meet rising demand. Currently, banks are holding over ZiG200 million in cash for distribution.
Policy Rates and Inflation Expectations
The RBZ retained the Bank Policy Rate at 35%, stating it remains appropriate given projected year-end inflation of around 30%, resulting in a positive real interest rate of 5%. Deposit interest rates remain at 5% for savings and 7.5% for time deposits in ZiG, while USD deposits yield 2.5% for savings and 4% for time deposits.
Targeted Finance and Exporter Policy
The Targeted Finance Facility (TFF), funded from banks’ statutory reserves, will continue to support agriculture, manufacturing, and retail. Exporters will retain 70% of their foreign currency earnings, with the 30% surrender requirement remaining in place.
Stakeholder Concerns and RBZ Responses
From stakeholder consultations held between 7 and 14 July 2025, several key issues were raised:
- High bank charges: RBZ urged banks to review pricing and exempt accounts with less than US$100 or equivalent in ZiG from charges.
- Currency discrimination: RBZ reiterated that economic agents must accept both ZiG and USD. The Financial Intelligence Unit (FIU) will enforce compliance.
- Unclear de-dollarisation roadmap: RBZ indicated that clarity will be provided in the forthcoming National Development Strategy II (NDS2).
Compliance and Penalties
The RBZ noted increased cases of non-compliance with foreign exchange regulations. Penalties have been raised to 1% of the transaction amount or US$100,000 (or ZiG equivalent), whichever is greater. Sanctions may also include suspension or revocation of licences.
Conclusion and Outlook
The RBZ stated that it will continue implementing measures to strengthen monetary policy operations. Monthly inflation is expected to remain within the 1–3% range, while the current account surplus is projected to grow from US$501.2 million in 2024 to US$621.7 million in 2025.
The bank reaffirmed its commitment to maintaining monetary discipline and ensuring continued macroeconomic stability.
