RBZ Governor John Mushayavanhu’s latest Monetary Policy Statement is themed “Staying the Course” – and he’s done exactly that. There are no big changes, with RBZ holding rates steady, showing how anxious authorities are about sparking a new round of inflation.
Some highlights:
Interest Rates stay put
Business had asked the RBZ to lower the main interest rate to make borrowing cheaper. But Mushayavanhu, acknowledging their pleas for lower rates, stuck with 35%, saying it’s enough to cover expected inflation.
He says: “The Reserve Bank reaffirms that the current Bank Policy rate is well calibrated based on inflation and output dynamics.”
Businesses also wanted the RBZ to ease statutory reserves – the money banks required to keep locked up in reserve – so that banks could lend more. No luck there either. Says Mushayavanhu: “The current statutory reserve requirements are set between 15% and 30% depending on the nature of the deposits. Banking institutions can, therefore, easily reduce the effective statutory reserve requirements towards 15% by attracting more long-term deposits.”
No joy for exporters
Exporters are still forced to surrender 30% of their earnings in ZiG. RBZ isn’t changing that, saying this ties into the broader plan to bring back the local currency. “The foreign currency retention level for exporters has been maintained at 70% and will be reviewed in line with the de-dollarisation road-map, which will be informed by the forthcoming National Development Strategy II (NDS2) blueprint.”
ZiG use ‘growing’, but USD still rules
RBZ says more people are using ZiG, with local currency payments up from 26% in April 2024 to over 40% in June 2025. Banks are being told to push out more ZiG cash, especially via ATMs. “The Reserve Bank has directed banking institutions to increase access of ZiG through ATMs and banking halls… Currently, the banking sector is holding in their vaults a total of over ZiG200 million in cash awaiting distribution to banking clients in need.”
But USD still dominates, as RBZ’s own data shows: “Foreign currency denominated (bank) deposits accounted for 84.7% of total bank deposits as at 30 June 2025.”
2030 Jitters
RBZ says businesses are nervous about the plan to return to full local currency use in 2030, so nervous that banks are avoiding long-term lending beyond that date. Mushayavanhu is trying to calm nerves, saying he will make sure USD contracts remain untouched: “The roadmap will undoubtedly encapsulate the need to maintain the current stability, preserve the foreign currency accounts and the existing USD denominated contracts. Consideration will always be made to ensure that there is business continuity and certainty.”
New FX penalties
Exporters and importers who violate exchange rate laws, such as failing to submit the required paperwork on time, will now face stiffer penalties. “The Reserve Bank has revised the penalty fees for non-compliance upwards to 1% of the transaction amount or one hundred thousand United States dollars (US$100,000.00 or ZiG equivalent), whichever is greater or suspension or revocation of foreign exchange trading licence.”
Banks still making more money from frees
RBZ data shows banks are still making more money from fees than from lending. Non-interest income made up 55% of their profits, with 45% of that coming from charges. Lending income is up though to 32%, from just 10.4% a year ago.
Who’s getting the loans? Productive sectors took 72% of all loans. Agriculture got 16.8%, manufacturing 12.2%, and distribution 10.9%.
Where the USD is going?
Between January and June 2025, banks made foreign payments worth US$5 billion, up 17% from last year. Of these payments, US$1.9 billion, or 39%, went to raw materials and capital goods. Fuel imports hit US$853 million, up 13%, while electricity imports dropped 14% as local generation slightly recovered.
Forex Earnings Up
Zimbabwe earned US$7.3 billion in forex in the first half of 2025, up 23% from the same period last year. Most of the money is coming from exports, at US$3.6 billion, accounting for 54.5% of all earnings. Gold alone brought in US$1.4 billion. Diaspora remittances were just over US$1 billion, up 15%, and contributing 17% to forex earnings.
