RBZ Drops Fixed Timeline for Monocurrency Shift, Adopts Conditions-Based Approach

RBZ Headquarters

Harare — The Reserve Bank of Zimbabwe (RBZ) has officially decoupled its transition to a monocurrency system from a fixed timeline, opting instead for a conditions-based framework under which the move will only be implemented once strict economic benchmarks are met.

The shift marks a significant recalibration of Zimbabwe’s monetary strategy and comes amid growing caution within the financial sector. Banks have reportedly stopped extending loans structured around the previously cited 2030 monocurrency target, while businesses and consumers continue to hold foreign currency outside formal channels, tightening liquidity in an economy already constrained by limited hard currency inflows.

By abandoning a calendar-driven approach, the RBZ is signalling a more cautious and flexible path toward monocurrency, prioritising macroeconomic stability, foreign reserve adequacy, and sustained price stability over adherence to an arbitrary deadline.

Import Cover and Inflation Take Centre Stage

The revised strategy was outlined during discussions last Friday involving the International Monetary Fund (IMF), Treasury officials, and the central bank. RBZ Governor John Mushayavanhu said the transition would only proceed once clearly defined “conditions precedent” are satisfied.

Chief among these is the accumulation of three to six months of import cover, a benchmark widely regarded as critical for currency stability. Zimbabwe currently has about 1.5 months of import cover, well below the target range. “Currently, we are sitting at about 1.5 months. We are not there yet, but we are making progress,” Mushayavanhu said. “Once we get there, we will clearly outline the next steps.”

Using last year’s trade data, a six-month import cover would require approximately US$4.69 billion in reserves. The RBZ is also insisting on sustained low inflation as a prerequisite. While Zimbabwe recorded zero-digit inflation in January, Mushayavanhu said the focus is on maintaining that stability over time. “We achieved zero-digit inflation in January, and we want to sustain it,” he said. “That is one of the outcomes the IMF expects during the Staff-Monitored Programme period.”

IMF Emphasises Stability and Coordination

IMF mission chief for Zimbabwe Wojciech Maliszewski said the Staff-Monitored Programme (SMP) will prioritise preserving recent stabilisation gains, improving the functioning of the foreign exchange market, and strengthening coordination between monetary and fiscal policy. “The focus for now will be to ensure that the recent gains in stabilisation are sustained, particularly through the monetary policy stance and a substantial improvement in the functioning of the foreign exchange market,” Maliszewski said.

He added that fiscal discipline and structural reforms are essential to restoring investor confidence and creating a durable foundation for growth.

Treasury Downplays Short-Term ZiG Constraints

Meanwhile, Finance, Economic Development, and Investment Promotion permanent secretary George Guvamatanga cautioned against interpreting current challenges, such as the ZiG currency’s inability to purchase fuel, as evidence of long-term failure. He noted that electronic usage of ZiG has increased, suggesting gradual adoption even as confidence builds.

Under the new framework, the RBZ says monocurrency will only be introduced when conditions allow, not when a date arrives, underscoring a policy shift shaped by lessons from past currency instability.

RBZ monocurrency plan; Zimbabwe monocurrency transition; ZiG currency news