Economists have criticized the Reserve Bank of Zimbabwe (RBZ)’s 2025 Monetary Policy Statement (MPS), delivered by Governor John Mushayavanhu, arguing that it fails to tackle the country’s core economic challenges.
One of the key issues highlighted was the reduction of the foreign currency retention threshold from 75% to 70%, which, despite widespread calls for an increase, adds further pressure on businesses.
Speaking to Business Times, Eddie Cross, an economist and former member of the Monetary Policy Committee said that the MPS neglected to address the fundamental issues facing the economy. Said Cross:
The Monetary Policy Statement did not address the key fundamentals. It contributes little to stabilizing the ZiG or the broader economy.
The Governor’s remarks blaming retailers for the crisis were uncalled for. We need serious efforts to stabilize the local currency and a structured de-dollarization process.
We have lost significant ground over the past two months, and nothing in this policy will reverse that.
Economist Tony Hawkins also criticised the MPS, arguing that it lacks credibility and fails to inspire confidence in the ZiG. He said:
This is yet another attempt to push the market into accepting the ZiG, despite ten months of evidence showing its rejection. The policy lacks both credibility and innovative solutions.
Claims of exchange rate and price stability ring hollow, especially after a month where consumer prices—both in ZiG and US dollars—rose above the annual average for sub-Saharan Africa.
Hawkins also expressed concern over the excessive growth of the money supply, estimating a 600% increase in reserve money.
Meanwhile, Gift Mugano criticized the MPS as overly punitive, especially towards exporters. Said Mugano:
The policy effectively weakens exporters by reducing their forex retention threshold. Many are already struggling with working capital shortages due to the previous 75% retention, and this reduction will only worsen their position.
It makes Zimbabwe less competitive globally.
Economist Malone Gwadu argued that the RBZ is prioritizing the stability of the ZiG at the expense of industry growth. Said Gwadu:
Policies like high interest rates and tight reserve controls are aimed at preventing excess liquidity and inflation. The central bank’s push to liberalize the forex market is a step in the right direction, but the industry is in distress.
The tight monetary policy must be balanced with measures that support production. Perhaps gradually refining the Targeted Finance Facility (TFF) could help provide relief to struggling industries.
Prosper Chitambara said the reduction in forex retention is part of the government’s broader de-dollarization strategy and an effort to build foreign currency reserves.
He said reserves are essential, as they provide critical support for the ZiG.
However, Chitambara stressed that Zimbabwe’s current reserves, estimated at around US$500 million, fall significantly short of the US$3 billion needed to cover a minimum three-month import requirement for economic stability. He added:
While reserve accumulation is essential, this policy effectively acts as an indirect tax on exporters, who would prefer to retain more of their forex earnings.
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