Online Reporter
Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) maintains that current foreign exchange surrender requirements are important in supporting critical sectors that lack access to foreign currency.
In the 2025 Monetary Policy Statement, the central bank revised the retention rate to 70 percent from 75 percent.
This means 30 percent of foreign exchange earnings are surrendered to the central bank in exchange for the local currency, ZimGold (ZiG).
The retention policy is designed to bolster critical reserves that support ZiG, ensure stability in the interbank foreign exchange market and increase the foreign currency supply to critical sectors of the economy.
According to the RBZ, the retained foreign exchange is channelled to sectors that do not generate their own foreign currency but require critical inputs.
Some manufacturing and mining companies have been lobbying for a reduction in mandatory surrender portions to between 5 and 10 percent.
Exporters argue that many of their inputs — fuel, raw materials, equipment, spare parts, et cetera — are priced in foreign currency and, therefore, surrendering 30 percent of their export erodes their profitability and working capital.
They also claim this limits the ability to reinvest in their businesses.
In the past, the Horticultural Development Council described the retention policy as “unfair and counterproductive” and noted the “significant mismatch between reduced forex retentions and high USD-denominated costs”.
The RBZ, however, says the retention policy is meant to ensure that the interbank market has sufficient foreign currency to function smoothly and meet legitimate import demands for those sectors that do not generate their own forex.
Some of the key areas prioritised for foreign currency allocation are medical imports and inputs for industry.
Allocations to critical sectors are meant to drive economic growth.
RBZ Deputy Governor Dr Innocent Matshe, who represented Governor Dr John Mushayavanhu at the recent inaugural European Union-Zimbabwe Business Forum, said the foreign exchange allocation framework and the revised retention policy for exporters are critical components of monetary policy.
“Export surrender requirements themselves are critical for redistributing foreign currency in this multi-currency environment, so that there is an assurance of availability of foreign currency for critical imports,” he said.
“It is key that we realise that some of these imports are needed in sectors that do not generate foreign currency; therefore, there is a need for redistribution . . . The current 30 percent surrender requirement is in line with the prevailing proportion of ZiG transactions in the economy; it is these proportions that we use to adjust surrender requirements. As the proportion of ZiG increases, so will the adjustments of surrender requirements. There is not going to be a glitch in exporters receiving the true value for their exports. That is an assurance that the central bank will continue to give to the markets.”
The retention policy is also critical in building foreign currency reserves necessary for anchoring the value of ZiG.
The accumulation of foreign currency reserves creates a buffer against external shocks and also allows for the settlement of international transactions, which helps in maintaining confidence in the local financial system.
