Story Stanley James, by Business Editor
THE Reserve Bank of Zimbabwe (RBZ) has set sights on growth and stability by reducing exporters’ foreign currency retention thresholds, maintaining the bank policy rate, and increasing the use of the ZiG and banking sector confidence.
Presenting the 2025 Monetary Policy Statement in Harare this Thursday, Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu announced a reduction in the exporters’ foreign currency retention thresholds, in a move aimed at further bolstering the use of the Zimbabwe Gold.
“To guarantee continued stability in the interbank foreign exchange market through augmenting the supply of foreign currency reserves needed to anchor the ZiG, the foreign currency retention level for exporters has been reduced with immediate effect, this implies that the effective surrender portion of export proceeds has been increased from 25 percent to 30 percent.
“This review is consistent with the increased use of ZiG in the economy, the additional 5 percent will ensure that exporters mobilise sufficient ZiG to meet local currency obligations and other expenses including tax payments going forward,” Dr Mushayavanhu said.
The central bank also refined the foreign exchange management system.
“To engender greater flexibility and deepen the foreign exchange market while enhancing its efficiency and the price discovery mechanism, the Reserve Bank is further refining and clarifying the Interbank Foreign Exchange Trading guide to authorised dealers as follows, the five percent trading margin as communicated in the previous Interbank Foreign Exchange Trading Guidelines issued at the inception of the willing buyer, willing seller foreign exchange trading arrangements on 3 May 2024 only applicable for the determination of the starting exchange rate following the introduction of the new currency, ZiG, ” he added.
With monetary authorities revealing milestones since the launch of the ZiG, improving confidence in the local markets tops the RBZ priorities.
“Consistent with its monetary policy objectives of ensuring currency and exchange rate stability, the Reserve Bank is committed to the continued accumulation of reserves to cover ZiG reserve money in the economy, the Reserve Bank will leverage its foreign reserves build up strategy on the anticipated increase in gold production through in-kind royalties, purchase of foreign exchange export surrender proceeds and from willing sellers of foreign exchange in the WBWS market,” the Governor said.
Measures to boost deposits and increase banking sector confidence were also unveiled.
“Considering recent stakeholder concerns and the need to reward depositors, the minimum interest rates for savings and time deposits in both ZiG and USD have been reviewed upwards with immediate effect, depositors should take advantage of these interest rates to place their savings in these interest-bearing savings and time deposits as opposed to non-interest bearing accounts,” he said.
Takeaways from the monetary policy presentation include an expected decline in inflation, removal of limits on foreign exchange trading, a bank policy rate maintained at 35 percent per annum, a tight liquidity management system, and a multi-currency system maintained, among others.
