RBZ rubbishes IMF observations on policy

The Reserve Bank of Zimbabwe (RBZ) has defended its monetary policy and the recently introduced Zimbabwe Gold (ZiG) currency framework, responding to recommendations made by the International Monetary Fund (IMF) in its August 2025 review.

While the IMF praised Zimbabwe's tight monetary policy for stabilising the ZiG and controlling inflation, it recommended reducing the RBZ's involvement in the foreign exchange (FX) market, including lowering the mandatory 30% export surrender requirement, and transitioning toward a more market-driven approach. The IMF also called for simplifying the Zimbabwean dollar's exchange rate system, citing inconsistencies with a floating rate regime.

The RBZ, however, disagreed, arguing that its active role in the FX market provides essential flexibility for stabilising the currency and strengthening reserves. The central bank emphasized that maintaining a managed FX framework is critical to ensuring exchange rate stability and questioned the IMF's recommendation to reduce its involvement.

Regarding broader monetary policy, the IMF suggested phasing out Non-Negotiable Certificates of Deposit (NNCDs) and replacing them with tradable securities to improve liquidity management. The RBZ responded by outlining plans to reduce reliance on direct monetary tools and enhance policy transmission, including the introduction of a Term Deposit Facility.

The RBZ also rejected IMF concerns over exchange rate restrictions, clarifying that recent reforms have removed all formal limitations. Any remaining procedures are internal measures by financial institutions and not government-imposed controls.

Despite these disagreements, the RBZ expressed openness to future reforms, including enhancing FX market transparency and exploring IMF technical assistance. The central bank reaffirmed its commitment to price stability and long-term financial reforms, with a target to transition to a mono-currency system by 2030.

This response signals the RBZ's determination to maintain a controlled, stabilizing approach to monetary policy while remaining open to gradual reforms aligned with Zimbabwe's economic priorities.