Latest news with #RBZ
Zawya
07-07-2025
- Business
- Zawya
Zimbabwe abolishes decades-old dual exchange rate controls
The Reserve Bank of Zimbabwe announced the decision through a statutory instrument, marking the end of controls imposed over the past two decades to force the use of local currency. RBZ Deputy Governor Innocent Matshe said: 'We want the market players to drive activity, not the central bank or its agents. The heavy-handedness is gone. You will never see it again.' The central bank previously arrested traders through its financial intelligence unit and police for pricing goods and services more than 10% above official exchange rates. Whilst the measures aimed to stabilise the economy, they suppressed market forces and created an unpredictable and often hostile operating environment. The International Monetary Fund (IMF) has repeatedly urged authorities to fully liberalise the currency market. In a June 18 release, the lender reiterated calls for 'elimination of undesirable exchange restrictions'. The liberalisation aims to reduce pricing distortions, increase competitiveness, and harmonise the formal and informal sectors, which had previously operated under a dual exchange rate system. While the RBZ maintains that the ZiG remains gold-backed and stable, some analysts note that the shift to a floating exchange rate raises questions about the currency's continued asset backing and exposes it to market volatility. The move comes as Finance, Economic Development, and Investment Promotion Minister Professor Mthuli Ncube officially repealed a regulation introduced in May 2024 to settle the exchange rates, seen as part of a move towards more normal economic conditions. © Copyright The Zimbabwean. All rights reserved. Provided by SyndiGate Media Inc. (
The Star
19-06-2025
- Business
- The Star
Zimbabwe boosts gold reserves to 3.4 metric tons to support ZiG currency
HARARE, June 19 (Xinhua) -- Zimbabwe is steadily building its gold reserves to support the Zimbabwe Gold (ZiG) currency introduced in April last year, with reserves now standing at 3.4 metric tons, the Presidential Communications Department said Thursday. In a post on X, the department said President Emmerson Mnangagwa toured the gold vaults of the Reserve Bank of Zimbabwe (RBZ) on Thursday. The RBZ plans to increase national gold reserves to 5 metric tons by the end of this year. In his address to the media after the inspection, Mnangagwa said the reserves are critical, serving as one of the key fundamentals needed for a stable national currency. RBZ Governor John Mushayavanhu said the current gold reserves held by the central bank are more than sufficient to back the ZiG in circulation. He said the ongoing stability of the local currency is a result of rising reserves and sound fiscal policies. The ZiG, launched last April as Zimbabwe's latest attempt at currency reform, has remained largely stable in recent months due to the central bank's tight monetary policy stance. On Wednesday, the International Monetary Fund praised Zimbabwe's macroeconomic stability, noting that the country's disciplined policies have helped stabilize the ZiG and reduce inflation.
Business Insider
18-06-2025
- Business
- Business Insider
Zimbabwe's gold-backed currency faces credibility test despite central bank optimism
Zimbabwe's gold-backed currency, the Zimbabwe Gold (ZiG), continues to face skepticism from both the public and financial analysts, despite central bank assurances of stability and full reserve backing. Zimbabwe's gold-backed currency, the Zimbabwe Gold (ZiG), faces public and financial analyst skepticism Past economic issues, including hyperinflation and currency shifts, continue to erode public trust in new currency measures. The share of transactions using the ZiG has increased, though many citizens still rely on the U.S. dollar due to past economic turmoil. The Reserve Bank of Zimbabwe (RBZ) claims the currency is supported by more than 100% in reserves, including 2.5 tons of gold and $100 million in foreign assets. The ZiG, Zimbabwe's sixth currency attempt in 15 years, was introduced to curb inflation and restore confidence in the local monetary system. Yet many citizens still rely on the U.S. dollar for daily transactions, with past economic turmoil continuing to erode trust. Although the International Monetary Fund has expressed support for the ZiG and its potential to become a full national currency, uptake remains limited. Government efforts to boost usage have yet to overcome deep-rooted doubts among both consumers and investors. According to Reuters, the RBZ kept its benchmark interest rate at 35% on Monday, citing exchange rate stability. It also reported total reserves of $701 million and noted that the share of transactions using the ZiG jumped to 43% in May, up from 26% in April when the currency was launched. The Zig's credibility issues Last year, Zimbabwe introduced a new gold-backed currency known as the ZiG, or Zimbabwe Gold, in a bid to curb longstanding currency instability and decades of hyperinflation. The Zimbabwe Gold (ZiG), has however, continued to face a significant trust gap, as evidenced by persistent premiums in the parallel market, where it trades below the official rate. This skepticism persists despite the central bank's assertion that the ZiG is now backed by more than 100% in reserves, comprising gold and foreign currency. The country's tumultuous monetary history, marked by hyperinflation and abrupt currency shifts, has contributed to this lack of confidence. While responding to Reuters, Reserve Bank Governor John Mushayavanhu reaffirmed the central bank's commitment to the ZiG, stating: ' ZiG is our national currency, and we are committed to ensuring its success by maintaining all the fundamental characteristics of sound money, including its function as a reliable store of value. ' He added, ' The Reserve Bank has learned from previous currency failures that maintaining an optimal money supply and ensuring monetary stability is vital. ' Finance Minister Mthuli Ncube remains optimistic, expressing confidence that monetary reforms will pave the way for $2.6 billion in bridge financing by mid-2026. However, global investors are cautious, with Jetro Siekkinen of LGT Capital Partners stating, " We wouldn't invest in Zimbabwe at the current stages. The country needs to have a lot more development before we would consider it," as reported by Reuters. Analysts have also raised concerns about Zimbabwe's overall reserve position, noting that the country holds just 0.8 months of import cover, well below the International Monetary Fund's three-month benchmark. Other factors include past policy failures, doubts over gold reserve transparency, limited convertibility, and persistent inflation which all fuel skepticism. A strong black-market presence and continued reliance on U.S. dollars further weaken confidence.
The Star
17-06-2025
- Business
- The Star
Zimbabwe maintains policy rate to ensure economic stability
HARARE, June 17 (Xinhua) -- Zimbabwean monetary authorities have decided to maintain the bank policy rate at 35 percent to ensure economic stability amid global trade tensions, Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu said on Tuesday. In a statement released following a meeting of the RBZ Monetary Policy Committee (MPC) held on Monday, Mushayavanhu said the central bank's tight monetary policy stance has resulted in sustained stability in the exchange rate and inflation during the second quarter of 2025. As a result of the positive domestic macroeconomic developments, the MPC resolved to maintain the bank policy rate at 35 percent to maintain price and exchange rate stability, Mushayavanhu added. The bank policy rate was raised from 20 percent to 30 percent in September last year when the central bank devalued the local currency, Zimbabwe Gold, by 43 percent following exchange rate volatility. "The MPC noted the broad-based deceleration of global growth occasioned by escalating trade tensions, geo-economic fragmentation, regional and international conflicts, and policy uncertainty," he said. "Considering the challenging and rapidly evolving risks to the global growth outlook, the MPC advised the RBZ to maintain a sufficiently tight monetary policy stance." He noted that despite uncertainty in the external environment, Zimbabwe's economy continues to show resilience and is projected to grow by 6 percent in 2025, underpinned by a recovery in the agricultural sector. Other sectors are also expected to record positive growth performance, benefiting from the prevailing price and exchange rate stability, he said. Last week, the Parliament of Zimbabwe called for a reduction in bank charges and the bank policy rate to boost public confidence in the banking sector and stimulate lending to the country's productive sectors.
Zawya
05-06-2025
- Business
- Zawya
Zimbabwe: Food security and markets monitoring report, April 2025
Situation Update The Second Round Crops, Livestock and Fisheries Assessment (CLAFA-2, 2025) reports a strong recovery in Zimbabwe's agricultural sector, with total cereal production reaching 2,928,206 MT, driven by improved weather conditions and expanded cultivation of maize (up 6.4%) and drought-resistant traditional grains (pearl millet up 29%). Despite a national cereal surplus ranging from 811,732MT to 1,225,732 MT, some districts will require food assistance highlighting persistent regional disparities (CLAFA-2, 2025). The rebound underscores the success of climate-adaptive policies, but targeted interventions remain critical to address food distribution gaps. On the economic front, Zimbabwe's annual inflation stood at 85.7% (April 2025), with a 0.6% monthly rise in local currency prices, while USD-denominated inflation remained low (0.2% monthly). The FAO Food Price Index rose 1% in April, influenced by higher cereal, dairy, and meat prices, though it remains 19.9% below its 2022 peak. Meanwhile, the Food Poverty Line (FPL) reached ZWG 862.06 per person, with the Total Consumption Poverty Line (TCPL) at ZWG 1,263.41, reflecting ongoing cost-of-living pressures despite agricultural recovery. Highlights In USD terms, the month on month inflation was 0.2% up from 0.1% while the annual inflation was 14.4% in April 2025. In local currency, the month on month inflation rate was 0.6% up from -0.1% in March 2025 (RBZ). The seasonal rainfall performance has been characterised by mixed conditions but has concluded generally on a positive note with the country estimating surplus agricultural production (WFP Monitoring). The CLAFA-2 report observed some improvements in crop, livestock and pasture conditions across the country due to significant rains received in both surplus and deficit– producing areas. Maize meal was available in an average of 85% of the rural and urban markets. Other food commodities monitored were generally available in most markets (WFP Monitoring). Price of food on the international market increased by 1% according to the FAO price index. The index stood at 128.3 points. The USD and ZWG cost of the monitored food and non food essential needs basket remained the same in both urban and rural markets when compared to March 2025 (WFP Monitoring). © Copyright The Zimbabwean. All rights reserved. Provided by SyndiGate Media Inc. (
