Online Reporter
Tapiwanashe Mangwiro
THE Reserve Bank of Zimbabwe kept reserve money growth within targets agreed with the International Monetary Fund under the Staff-Monitored Programme during the first half of the year, a senior bank official said.
This reinforces efforts to maintain monetary stability and contain inflationary pressures.
Presenting the 2026 Mid-Term Monetary Policy Statement on Thursday, RBZ Governor Dr John Mushayavanhu said reserve money levels remained below the programme ceilings for both the first and second quarters.
Reserve money stood at ZiG5,73 billion in the first quarter against an SMP target of ZiG5,95 billion, while the second-quarter position was ZiG6,60 billion against a target of ZiG7,33 billion.
The figures point to tighter control of the monetary base at a time when the central bank has been seeking to strengthen confidence in the local currency and ensure that liquidity growth remains consistent with the prevailing macroeconomic stability.
Dr Mushayavanhu said reserve money growth had been contained during the first six months, supported by effective liquidity management, even as the broad money supply continued to expand.
“Reserve money levels for Q1/2026 and Q2/2026 stood at ZiG5,73 billion and ZiG6,60 billion, respectively, within SMP targets agreed between the Reserve Bank and the IMF of ZiG5.95 billion and ZiG7,33 billion, respectively,” he said.
Total reserve money, comprising ZiG and foreign currency components, reached ZiG34,69 billion at the end of June, with about 20 percent held in local currency.
Annual growth in aggregate reserve money slowed sharply to 39,35 percent in June 2026, from 243,94 percent in the corresponding period last year.
The deceleration was even more pronounced in the ZiG component, whose annual growth fell from 279,74 percent in June 2025 to 41,93 percent by June this year.
Banker Mr Raymond Madziva said keeping reserve money growth under check is the most positive thing of the first half of the year.
“The key issue is not simply that reserve money is increasing, but that its growth is being kept within clearly defined programme targets.
This gives the market greater confidence that liquidity creation is being managed in a disciplined manner and reduces the risk of excessive monetary expansion feeding into inflation,” he said.
Economist Ms Pauline Gunda said the performance also needed to be viewed alongside the expansion in broad money, which showed that liquidity in the wider economy was still increasing.
She said, “The moderation in reserve money growth is encouraging from a stability perspective, although the expansion in broad money needs continued monitoring. What matters now is ensuring that money supply growth is supported by productive economic activity rather than speculative demand or excessive pressure on prices and the exchange rate.”
Meanwhile, broad money supply, measured by M3, increased by 31,4 percent from ZiG108,09 billion in December 2025 to ZiG142,01 billion in June 2026.
On a year-on-year basis, M3 growth slowed to 45,9 percent in June, compared with 127,8 percent in June 2025, reflecting a significant moderation despite continued monetary expansion.
The growth in broad money was driven by increases in both local and foreign currency deposits.
The local currency component of M3 rose from ZiG20,17 billion in December 2025 to ZiG27,95 billion by June, consistent with increased use of the local currency in domestic transactions.
On an annual basis, the ZiG component of broad money increased by 62,5 percent in June, down from 87,2 percent in the same month last year.
The latest figures suggest that the central bank’s liquidity-management measures are beginning to deliver a more controlled monetary environment, with both reserve money and broad money growth moderating from the exceptionally high rates recorded in 2025.
Maintaining this trajectory, for policymakers, will be critical as the economy balances increased local currency usage with the need to prevent excess liquidity from undermining the stability gains recorded so far in 2026.
