Be Clear on De-Dollarisation, FBC Urges RBZ

Reserve Bank Of Zimbabwe (image source)

Reporter

As Zimbabwe edges closer to discarding its multi-currency regime in favor of the domestic Zimbabwe Gold (ZiG), FBC Holdings Limited has called on the Reserve Bank of Zimbabwe (RBZ) to unveil a robust, transparent de-dollarisation framework. The advisory, issued in FBC’s comprehensive review of the 2025 Mid-Term Monetary Policy Statement, warns that without foresight, economic confidence could falter, risking a slide reminiscent of prior abrupt currency changes.

FBC delineated its core demand in clear terms: “The de-dollarisation roadmap must be anchored by a strong import-substitution strategy that eases pressure on scarce foreign currency reserves.” While the ZiG may carry symbolic value, it must be anchored by real delivery and public trust—especially given Zimbabwe’s history of tumultuous monetary transitions.

The firm emphasizes a targeted role for inflows, stating that remittances, exports, and diaspora earnings should be channeled toward bolstering domestic currency usage. This is vital not only for currency credibility, but also for enhancing export competitiveness in non-traditional sectors and for establishing clear domestic pricing mechanisms across both public and private sectors.

FBC noted with cautious optimism that the ZiG’s usage is already gaining traction in both digital and cash transactions, as its share rose from 26% in April 2024 to over 40% by June 2025, signaling growing acceptance among businesses and households. Still, FBC insists this momentum needs reinforcement through sustained confidence-building reforms and consistent macroeconomic policy.

On the fiscal front, Zimbabwe’s foreign currency inflows reached US$7.3 billion between January and June 2025, a 23.1% increase year-on-year, and reserves rose to US$730 million, dramatically higher than the US$285 million recorded in April 2024. While the inflows give RBZ breathing space, disciplined use is key.

IH Securities has praised RBZ Governor John Mushayavanhu for implementing a tight monetary policy, containing money supply growth and using policy tools to manage inflation, echoing Milton Friedman’s adage that “inflation is… a monetary phenomenon.” IH Securities also welcomed the bank’s consultative approach with industry bodies, although they caution that the export retention policy still needs consistent enforcement to ensure exporters receive the local currency portion of their proceeds.

That tight policy, however, has come with trade-offs. Businesses and consumers face elevated interest rates and constrained credit, dampening investment, production, and consumption. Zimbabwe remains heavily dependent on foreign currency for trade and imports, further complicating liquidity.

Economists warn that rushing de-dollarisation absent of public trust, adequate forex buffers, and transparent mechanisms risks inflation, shortages, and recession. Historically, abrupt currency transitions without structural support have triggered sharp economic shocks.

FBC’s policy prescription includes clearly published timelines, strong import-substitution frameworks, balanced liquidity policy, effective export retention systems, and ongoing public-private dialogue.