The Reserve Bank of Zimbabwe (RBZ) on Thursday upheld the tight Monetary Policy stance as a strategy to conserve the local currency.
Presenting the Mid-Term Monetary Policy Statement (MPS), premised under the theme "Walking The Talk And Staying The Course," the central bank governor, Dr John Mushayavanhu, once again stated that the bank was receiving widespread acclaim for its sustained exchange rate stability.
The RBZ projected inflation to end the year at around 30%, giving a positive real interest rate of 5% and maintained the Bank Policy rate at 35% despite sustained outcry from industry on the need to ease the cost of borrowing.
The high policy rate has choked productivity in the recent past by worsening the cost of capital to fund critical industry needs. However, on its part, the RBZ believes that such rates are necessary to curb speculative borrowing.
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On bank charges, the MPS implored banks to adhere to the measures announced in the February 2025 Monetary Policy Statement to exempt from bank charges all accounts that maintain a balance below US$100 or its equivalent in ZiG.
In addition, Point of Sale (POS) transactions for amounts less than US$5 or its equivalent in ZiG were also exempted from transaction charges for both banking institutions and Payment System Providers (PSPs).
While a noble step, the move falls far short of addressing the thorn in flesh for the transacting public who are ordinarily forced to part ways with US$3,00 per every US$100 withdrawn from banks, a position which increases the cost of doing business, especially for corporates who withdraw large volumes of money.
"The current statutory reserve requirements are set between 15% and 30% depending on the nature of the deposits. Banking institutions can, therefore, easily reduce the effective statutory reserve requirements towards 15% by attracting more long-term deposits.
"The statutory reserve ratios, therefore, remain unchanged and will be reviewed when appropriate and consistent with the monetary policy thrust," reads the MPS in part.
This is despite complaints from the banking sector alleging that high statutory reserves are mopping up excess resources necessary to support productive lending.
The MPS maintained the export surrender thresholds at 30% but did not address the pertinent concerns raised by exporters who allege they have not been paid the ZWG portion for a prolonged period of time in what experts believe to be one of the strategies to protect the local unit.
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Market watchers suspect that the move to withhold the export surrender thresholds for fear of weakening ZWG is an indication of a currency facing the crisis of fragility.
Despite having triggered fears across the markets on impending monocurrency by 2030, Dr Mushayavanhu's MPS did not disclose the practical roadmap to his course of action, instead opting to give assurances of a workable process.
"The de-dollarisation roadmap will be crystallised in the National Development Strategy II and the Reserve Bank, which is chairing the NDS2 Thematic Working Group on Macroeconomic Stability and Financial Deepening (MESFIND) is currently seized with consultations on the issue.
"The roadmap will undoubtedly encapsulate the need to maintain the current stability, preserve the foreign currency accounts and the value of the existing USD-denominated contracts. Consideration will always be made to ensure that there is business continuity and certainty," the MPS added.
