RBZ tightens grip on forex as exporters surrender more earnings

STAFF WRITER

The Reserve Bank of Zimbabwe (RBZ) has slashed the foreign currency retention threshold for exporters from 75% to 70% as part of broader efforts to strengthen the domestic currency and bolster economic stability.

RBZ Governor Dr. John Mushayavanhu announced the adjustment while unveiling the 2025 Monetary Policy Statement in Harare on Thursday.

He emphasized that the move aligns with the bank’s long-term strategy to increase the use of the Zimbabwe Gold (ZiG) currency, which is set to become the country’s sole transactional currency by 2030.

“This measure ensures stability in the interbank foreign exchange market by augmenting forex supply and building the reserves necessary to anchor the ZiG,” Dr. Mushayavanhu stated.

The revision means exporters must now surrender 30% of their foreign earnings—up from the previous 25%—effective immediately.

To mitigate exchange rate risks associated with the new surrender requirements, the RBZ has introduced a US Dollar Denominated Deposit Facility (USDDDF). This initiative allows exporters to deposit the additional 5% of their surrendered forex with the central bank, which they can later withdraw in ZiG at the prevailing interbank rate.

“We are shifting the exchange rate risk from exporters to the central bank, which is part of our core mandate,” Dr. Mushayavanhu explained.

As part of its broader monetary policy measures, the RBZ has also rolled out a Targeted Finance Facility (TFF) to support productive sectors. The fund, sourced from statutory reserves already held by the bank, aims to increase lending without triggering inflationary pressures.

“The introduction of the TFF balances monetary stability with economic growth, enabling banks to extend credit to critical sectors without disrupting financial equilibrium,” the governor noted.

Retailers and wholesalers facing liquidity constraints will also benefit, as the facility has been expanded to help businesses restock efficiently. Additionally, beneficiaries will gain access to the Willing Buyer Willing Seller (WBWS) Interbank Forex Market for essential imports.

Dr. Mushayavanhu reaffirmed the RBZ’s commitment to maintaining a tight monetary policy stance, which he said is crucial for exchange rate stability—a key factor influencing inflation in Zimbabwe’s multi-currency system.

He projected that month-on-month inflation would remain below 3% throughout the year. However, he warned of a temporary uptick in annual inflation between April and September, driven by base effects from last October’s inflation spike. The RBZ expects inflation to settle between 20% and 30% by year-end.

With these latest policy shifts, the RBZ is reinforcing its focus on strengthening economic fundamentals, stabilizing the exchange rate, and fostering sustainable growth. Dr. Mushayavanhu assured that the central bank remains committed to a disciplined monetary approach while supporting key sectors to drive economic activity.

 

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