Online Reporter
Dr John Mushayavanhu
The International Monetary Fund (IMF) has just concluded its 2025 Article IV Consultation Mission for Zimbabwe, which involved the Fund, as usual, meeting with the Government, the Reserve Bank of Zimbabwe (RBZ), the private sector, civic organisations and other development partners to consult on economic developments in the country.
The consultations have been constructive and instrumental in shaping the country’s fiscal and monetary policies to promote and sustain macroeconomic stability.
The IMF applauded the Government for implementing prudent macroeconomic policies to support durable stability in the economy.
On the positive, the IMF commended the progress made to date by Zimbabwe in curbing inflation, strengthening monetary discipline and improving fiscal management.
The report further commended the current tight monetary policy, which has seen the economy experiencing some macroeconomic stability, especially after the sharp depreciation of the exchange rate in September 2024.
The report also affirmed the Government’s stance of halting quasi-fiscal operations and monetary financing of the fiscus.
Consequently, the policy measures have contributed towards the current disinflation trajectory and the wider macroeconomic stability.
The Fund noted that the country’s growth recovery trajectory is projected at 6 percent in 2025, reflecting the positive contributions of the current fiscal and monetary policies.
The Government is already implementing and addressing most of the issues raised by the IMF, taking into account the country’s peculiar circumstances and the need to ensure durable macroeconomic stability.
In some cases, the IMF has made some observations which the authorities had to clarify to ensure that accurate and actual developments in the economy are appropriately communicated.
In the February 2025 Monetary Policy Statement, the RBZ adopted “communication” in its monetary policy toolkit to ensure transparency and build market confidence and trust in policy credibility and consistency.
Zimbabwe introduced a new currency in April 2024 and is currently in its adjustment phase on the road to full mono-currency by 2030.
The transition process to mono-currency requires a cautious and gradual approach in the implementation of appropriate monetary and fiscal policies to create the desired conditions precedent.
The authorities’ views in the Article IV Consultation clearly articulates that we need to take into account Zimbabwe’s peculiar circumstances (the multi-currency environment) when addressing most of the issues raised by the IMF.
The Reserve Bank believes that when the desired fundamentals are in place, the road to mono-currency will be market-driven.
The RBZ, however, took exception to some of the recommendations proposed by the Fund, particularly the immediate redirection of exporter surrender requirements to the market in the current multi-currency system, dominated by a highly segmented market structure and without a robust interbank trading system infrastructure.
The Reserve Bank continued to call for a gradual approach, which emphasises the need to build on the current nascent macroeconomic stability gains to date.
The central bank and the Fund will, however, continue to engage on these critical areas.
Watchful and proactive
The Government is aware of the need to sustain the current strong monetary and fiscal policy to consolidate the current macroeconomic stability.
As such, the authorities remain watchful and proactive in responding to any emerging risks that may potentially destabilise the economy to engender sustainable stability.
In this context, the Reserve Bank has affirmed its commitment to remain vigilant and “stay the course” of the current prudent monetary policy management to ensure that the prevailing stability is consolidated and sustained.
The Reserve Bank remains resolute that sustained tight monetary conditions are essential to consolidating gains in macroeconomic stability.
The better-than-expected inflation outlook and significant convergence between the parallel exchange rate and general prices demonstrate that stability and reflect the continued positive impact of the current policies.
The authorities remain committed to ensure that there is fiscal and monetary policy cohesion and coordination to ensure that the current stability is not fragile but sustained.
The country is currently operating a floating exchange rate system under the willing buyer, willing seller (WBWS) arrangement, which is consistent with a liberalised foreign exchange market.
The Reserve Bank continues to implement initiatives and policies to enhance the efficient operation and deepen the WBWS.
The deepening of the WBWS is a natural and continuous process as the country progresses with its road map to the mono-currency.
The Reserve Bank’s strategy prioritises institutional readiness, such as strengthening the interbank market infrastructure, improving foreign exchange (FX) settlement systems and enhancing liquidity management.
De-dollarisation road map
Country experiences, including those from Latin America and Israel, of successful transition to a mono-currency have revealed vital conditions precedent.
While the Reserve Bank has cautioned that it is not always “a one-size-fits-all approach”, these conditions precedent include durable macroeconomic stability (low and stable inflation); adequate foreign currency reserves covering at least three months of imports; stable exchange rate dynamics; banking sector stability; fiscal sustainability (limited recourse to central bank financing); and the need for sustained creation of demand for use of the local currency.
As I indicated earlier, the transition process to mono-currency requires a cautious and gradual approach in the implementation of appropriate monetary and fiscal policies.
The Government has strategically made significant progress towards creating the necessary conditions precedent, which include the following:
Stable and low inflation, with average monthly inflation at 0,5 percent in 2025 and annual inflation between 20-30 percent by the end of year;
Stable exchange rate, with exchange rate variability within the regional convergence target of +/-10 percent;
Parallel market premium contained within tolerable levels for more than a year;
Optimal money supply management, with money supply in line with inflation and growth;
Increased foreign currency reserves from 0,4 months of import to 1,2 months as at the end of September 2025; and
Continued banking stability with NPLs (non-performing loans) at 2,9 percent against international benchmark of 5 percent.
The authorities remain committed to ensure that these macroeconomic conditions precedent are sustained and consolidated. These fundamentals will help build market confidence and also bring the desired business certainty, hence the road and speed to mono-currency will be market-driven.
Boosting international reserves
In April 2024, at the introduction of Zimbabwe Gold (ZiG), foreign currency reserves were at about 0,2 months of import cover. The Reserve Bank has been deliberately accumulating foreign currency reserves to support the long-term stability of the economy.
As a result, gross foreign reserves have risen steadily to over US$900 million, representing about 1,1 months of import cover on the back of record tobacco, gold output and other mineral exports.
The current foreign currency reserves accumulation strategy, which is also a gradual process, will result in adequate build-up of foreign currency reserves to target levels of three to six months in the short to medium term, critical to promote durable ZiG stability.
The country’s banking sector has remained safe, sound and resilient to shocks.
The Reserve Bank continues to implement Basel III standards, strengthen asset quality reviews and modernise liquidity management instruments.
Limits on banks’ net open positions are consistent with international best practice given Zimbabwe’s partial dollarisation.
The Reserve Bank remains committed to maintaining financial soundness, inclusion and intermediation efficiency to support economic growth.
Reliability of RBZ data
The comment on data coverage is standard for IMF reports and highlights continued efforts by countries under the Data Dissemination Standards.
The Government, the RBZ and the Zimbabwe National Statistics Agency (ZimStat) have been receiving technical assistance from the IMF, the World Bank and other regional organisations such as the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) with a view to continuously enhance the quality of statistics.
The country also continues to benchmark and harmonise statistical systems to regional standards, including SADC, COMESA and African union (AU).
In this regard, the authorities are confident of the integrity of our data, and that it is of high standard and is reliable.
Is Zimbabwe pushing back against IMF on de-dollarisation?
I remember reading an article like that in the press.
The article suggested that the Reserve Bank of Zimbabwe is rejecting IMF recommendations.
As highlighted above, the country has made significant strides towards meeting conditions precedent for transition to mono-currency.
It is important to continue to put effort to sustain the current bid.
The Reserve Bank continues to deepen and enhance the flexibility of the current interbank market.
In addition, the central bank continues to benefit from technical assistance missions by IMF aimed at strengthening the interbank foreign exchange market.
The Reserve Bank reaffirms that its monetary stance remains appropriately tight, as confirmed by recent inflation outcomes.
In the short to medium term, the Reserve Bank is working on transitioning to indirect monetary tools and open-market operations to sustain stability.
The Reserve Bank clarifies that the ZiG exchange rate is floating and market-determined through the WBWS arrangement.
In line with the floating exchange rate system, the Reserve Bank only strategically intervenes in the foreign exchange market to prevent excessive volatility in the exchange rate.
As highlighted in the 2025 Mid-Term Monetary Policy Statement, the foreign interbank market trades have been depicting normal behaviour of a floating foreign exchange market.
Balancing tight monetary policy and growth
Empirical evidence shows that macroeconomic stability, characterised by inflation and exchange rate stability, is a prerequisite for sustainable growth.
The IMF itself projects real gross domestic product (GDP) growth of 6 percent for 2025, which underscores that the current policy stance supports, rather than hinders, economic expansion.
Stability provides a foundation for private sector-led recovery and renewed investor confidence.
Business requires the right macroeconomic environment to thrive, and this should see the economy growing going forward.
The Reserve Bank recognises that confidence-building is not an event but takes time and is being addressed through consistent policy communication, improved liquidity management and increased use of ZiG in Government transactions.
The Reserve Bank is also reviewing transaction costs and payment infrastructure to enhance the attractiveness of local currency usage.
Some 40 days ago, the Reserve Bank launched a “ZiG Perception and Confidence Survey II”, and preliminary results show that the public is embracing ZiG, with the acceptance ratio rising from 40 percent in June 2024 to over 90 percent in September 2025.
In addition, ZiG transactions on the National Payment System have generally been trending upwards, from 26 percent in April 2024 to a peak of 43 percent in May 2025.
The Reserve Bank assures stakeholders that Treasury has committed to live within its means and has “walked the talk” since April 2024.
Coordination between fiscal and monetary authorities under the Liquidity Management Committee has ensured greater macroeconomic stability.
Dr John Mushayavanhu was responding to questions from The Sunday Mail’s Debra Matabvu.
