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The Reserve Bank of Zimbabwe (RBZ) has strongly defended its current monetary policy and exchange rate framework, expressing reservations about key recommendations made by the International Monetary Fund (IMF) staff regarding the newly introduced
Zimbabwe Gold (ZiG) currency.
The IMF this week issued a press release summarising the views of the Executive Board as expressed during its August 27, 2025 consideration of the staff report that concluded the Article IV consultation with Zimbabwe.
While acknowledging the recent effectiveness of “tight monetary policy” in stabilising the ZiG and curbing inflation, the RBZ has pushed back against calls to immediately overhaul its foreign exchange (FX) management system, particularly the mandated
surrender requirements.
The central bank underscored its “commitment to price stability and policy reforms,” confirming that it has “adopted communication into its monetary policy toolkit and clarified the hierarchy of its policy objectives and targets in line with staff advice.” Noting the
effectiveness of its recent policies in achieving initial stabilisation and lower inflation, the authorities remain committed to maintaining the tight monetary policy stance, enhanced by the recent tightening of NNCDs (Non-Negotiable Certificates of Deposit)
redemption requirements. IMF staff, however, estimated that a “target growth rate of about 50 percent for 2025 would be consistent with achieving the targeted 30 percent year-on-year inflation by the end of the year,” suggesting the current policy has been
instrumental in stabilising the ZiG.
The IMF staff identified several issues with the current framework, noting that the hybrid monetary anchor, where the ZiG is anchored and fully backed by a composite basket of reserves, “may create confusion about what constitutes the nominal anchor,” as such
notions are typically associated with a fixed parity. Furthermore, the staff argued that the WBWS (forex willing buyer-willing seller) exchange rate “does not appear to fluctuate in response to market conditions” and is “not consistent with a floating exchange rate
arrangement.”
The most significant contention between the two parties focuses on the operation of the FX market and the 30 percent export surrender requirement. The IMF recommended moving to a “more transparent, market-based FX system,” which requires “reducing the
RBZ’s footprint and restrictions in the FX market” and redirecting surrender requirements into the market through authorised dealers. The staff believes this is essential to make the exchange rate an effective intermediate target and “will also help narrow the gap
between the WBWS and parallel market rates,” bolstering confidence in the ZiG.
In opposition, the RBZ expressed reservations regarding staff’s recommendations on surrender requirements and Article VIII assessment. The RBZ underscored its view that the WBWS rate is “fully market-determined” and questioned staff’s assessment that it is
a dominant player in the WBWS market. The central bank argued that re-directing all or part of the current 30 percent surrender requirement to the market “would reduce scope for the RBZ to intervene to stabilise the rate, and would make the task of building the
international reserve buffer more difficult.”
The authorities were, however, open to directing “any incremental surrender requirements (above the current 30 percent)” to the market and limiting FX interventions to smooth excessive volatility, but only once a more transparent interbank FX trading platform
and other fundamentals are in place. The RBZ has since requested IMF “technical assistance in establishing an interbank trading system.”
Regarding monetary policy tools, the IMF staff noted that liquidity management through required reserve and NNCDs “does not support monetary policy transmission, market development and demand for ZiG.” Staff recommended that the RBZ should phase out
NNCDs, replacing them with “indirect and tradable securities carrying a market-based interest rate,” and that the RBZ should “relax the daily fulfillment of reserve requirements” to allow for liquidity smoothing.
The RBZ plans to move away from using direct monetary policy tools in the medium to long term, starting from the introduction of “multiple tenors for NNCDs and remunerating them,” and the introduction of a Term Deposit Facility to enable the use of interest
rates as a monetary policy tool. Furthermore, the authorities noted that the forthcoming NDS2 (National Development Strategy 2) “will clarify the operational implications for the USD and ZiG bank deposits, and policies on export surrender requirements in the
context of plans to transition to a mono-currency system by 2030.”
Finally, the RBZ disagreed with staff’s exchange rate restrictions assessment, deeming many restrictions as “desirable macroprudential policies” and arguing that “the latest unified FX guidelines had removed remaining de jure restrictions, with any de facto
continuation of previous requirements due to agents’ own internal procedures.” The authorities also planned to continue to improve financial sector oversight, including finalising the Basel III capital framework.
