Online Reporter
Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) has announced plans to engage mobile network operators to ensure parity in trading between local and foreign currencies under the multicurrency system, and to eliminate currency-linked discrepancies.
The move aims to create a more level playing field, allowing users to freely choose between transacting in either domestic or foreign currencies with ease and efficiency.
This follows concerns raised by stakeholders regarding several challenges associated with using the Zimbabwe Gold (ZiG) currency via mobile money platforms to purchase essential services — issues not encountered when transacting in US dollars. In some cases, prices quoted in local currency are significantly higher than those in US dollars and often disregard the official exchange rate.
Zimbabwe introduced the gold-backed domestic currency, ZiG, in April last year to replace the Zimbabwe dollar, whose value had been severely eroded by inflation. While the local unit has gained considerable traction — accounting for over 40 percent of transactions on the national payment system — challenges remain around universal acceptance and full market confidence.
ZiG has remained largely stable since its introduction, with monthly inflation falling and forecast to remain below three percent for the year. The annualised rate is expected to close within the 30 percent cap.
The majority of Zimbabweans rely heavily on mobile money services for a wide range of essential transactions, including purchasing goods and services, settling bills, paying school fees, and accessing other vital services. Despite this reality within the multicurrency framework, the usability and acceptance of ZiG remain limited in some areas compared to the US dollar.
The RBZ stated that addressing these challenges is critical to ensuring that legal tender in Zimbabwe is easily usable for transactions, thereby promoting a more efficient and inclusive financial system.
“The Reserve Bank will engage mobile money operators to ensure that there is equal trading in both domestic and foreign currencies in line with the multicurrency system,” the bank said in its 2025 Mid-Term Monetary Policy Statement Stakeholder Feedback Report.
The central bank said that resolving these issues could increase the acceptance of the local currency across the economy and enhance financial system inclusivity, ultimately benefiting users and supporting economic stability.
The RBZ also noted stakeholder concerns regarding excessively high banking fees, which are increasing the cost of conducting transactions through the formal banking system. These high charges place a financial burden on users, making it more expensive to manage finances and conduct transactions.
Stakeholders warned that this situation has far-reaching implications, including discouraging individuals and businesses from using formal banking channels and pushing them towards informal or alternative financial systems. They urged the central bank to consider revising fee structures to make them more competitive and user-friendly.
The RBZ reiterated its commitment to addressing the issue through moral suasion, continuously encouraging banks and financial institutions to adopt more favourable pricing policies via the Bankers Association of Zimbabwe (BAZ).
“Through moral suasion, the Reserve Bank continues to urge the BAZ pricing policies,” said the RBZ.
The bank aims to influence the behaviour of financial institutions, promoting more reasonable and customer-centric practices that can help reduce costs and improve access to financial services. This approach aligns with the RBZ’s role in shaping the conduct of the financial sector and fostering a more conducive environment for economic growth.
Earlier this year, RBZ Governor Dr John Mushayavanhu urged banks to move away from fee-income-based models. In his 2025 Monetary Policy Statement, he revealed that fees accounted for 22 percent of banks’ income, while lending — traditionally the core function of banks — accounted for just 13,46 percent.
High charges levied by Zimbabwean banks on both local currency and foreign currency accounts (FCAs) have frustrated depositors, who have accused financial institutions of exploiting them. These charges are discouraging individuals with foreign currency from banking.
Economist Tinevimbo Shava said banks are no longer focused on their core business of lending, and have resorted to high charges due to economic challenges.
“Banks are no longer involved in their core business, which is to lend money. In the circumstances, they have resorted to high bank charges to compensate for low lending levels,” he said.
Another economist, Dr Langton Mabhanga, described current bank charges as excessively high and burdensome.
“The charges are too high, especially given that the interest rates are negative. Regrettably, the banks are taking advantage of the inelastic demand for their services. However, this approach is ultimately detrimental to the banks themselves, as it erodes the value of their services and damages their relationship capital. In the long run, this strategy will compromise their competitiveness.”
Zimbabwe’s multicurrency system was introduced in February 2009, when the Government adopted a basket of currencies led by the US dollar, following the discontinuation of the Zimbabwean dollar.
There is a lot of money lying in pillows and mattresses at home and in safes and deposit boxes elsewhere. Those who are doing the right thing of banking cash are losing out. Banks are currently benefitting on the fact that most of their profits are in US dollars and are comfortable with earning less profit as long as it’s in US dollars.