RBZ reduces foreign liabilities to US$2.5 billion

One of the most significant achievements by the Reserve Bank of Zimbabwe (RBZ) over the past year has been the reduction of its foreign liabilities from about US$3.5 billion to US$2.5 billion by November 2025. This represents meaningful progress and reflects deliberate efforts to stabilise the central bank's balance sheet.

However, foreign liabilities remain the RBZ's Achilles heel and continue to expose the underlying fragility of the foreign exchange market. The scale of these obligations means confidence remains vulnerable to shocks, particularly in an economy that is still highly dollarised.

It is therefore critical that the next Monetary Policy Statement fully addresses this fragility, especially the "accounting rules" that altered the classification of foreign currency liabilities following the introduction of the Zimbabwe Gold (ZiG) currency. Greater transparency and clarity around these adjustments are necessary to sustain market confidence.

Under normal circumstances, a central bank should maintain a positive Net Foreign Assets (NFA) position. Until the RBZ decisively achieves this, currency stability will remain fragile, regardless of short-term gains in inflation or exchange rate management.