FOSTERING PRICE, CURRENCY AND EXCHANGE RATE STABILITY
THROUGH BALANCING
CONFIDENCE-TRUST-CREDIBILITY-EFFICIENCY-STABILITY-GROWTH
06 FEBRUARY 2025
MONETARY POLICY
STATEMENT

By
DR. J. MUSHAYAVANHU
GOVERNOR

TABLE OF CONTENTS

TABLE OF FIGURES
Figure 39: Interoperability Transaction Values and Volumes from April - Dec 2024 ... 55

LIST OF TABLES

SECTION ONE
INTRODUCTION AND BACKGROUND

1.
The 2025 Monetary Policy Statement is issued in terms of Section 46 of the Reserve
Bank of Zimbabwe Act [Chapter 22:15]. The Statement is being issued at a time
when the economy is experiencing relative inflation and exchange rate stability. The
stability reflects the tight monetary policy stance maintained by the Reserve Bank
during the last quarter of 2024, following the upward review of the Bank Policy
Rate and statutory reserve requirements.

2.
Greater exchange rate flexibility in the foreign exchange interbank market,
anchored by tight monetary conditions, has also gone a long way in supporting the
current stability. Specifically, strategic foreign exchange interventions by the
Reserve Bank have helped clear the market and enabled the smooth flow of foreign
exchange to the market. Going forward, the Reserve Bank will continue to deepen
the Willing-Buyer Willing-Seller (WBWS) foreign exchange interbank market to
enhance price discovery and market efficiency.

3.
The increased foreign currency inflows during the second half of 2024 was also
crucial in providing foreign exchange liquidity, thereby supporting the country's
balance of payments and maintaining the current account in a surplus position for
the rest of the year. The surplus on the current account is projected to further
improve in 2025.

4.
More importantly, the increased foreign currency inflows have allowed the buildup of foreign reserves, including gold, to support currency and exchange rate
stability. In addition to covering local currency reserve money, foreign currency
reserves also cover the entire local currency deposit base. The Reserve Bank will
continue to accumulate reserves to provide adequate backing for ZiG stability.

5.
Notwithstanding the positive developments on the inflation and exchange rate front,
the tight monetary policy resulted in some temporary liquidity challenges with
negative repercussions on economic activity. To ease the flow of funds in the
interbank market, the Reserve Bank introduced an intra-day facility for banks,
which eliminated payment gridlocks. The liquidity situation is expected to further
improve through disbursements under the Targeted Finance Facility (TFF) to
support productive sectors of the economy. The liquidity challenges also partly
reflected the general inclination of economic agents, in a dollarized economy, to
spend local currency while reserving foreign currency for store of value purposes.

6.
Going forward, as price and exchange rate stability is further entrenched, the
Reserve Bank will continue to delicately balance the trade-off between growth and
inflation. As such, the Reserve Bank will ensure that its current monetary policy
stance remains supportive of the envisaged growth of 6% in 2025.

7.
As part of the preparation of this Monetary Policy Statement, the Reserve Bank had
extensive stakeholder1 engagements and consultations to leverage critical feedback
and inputs required in mapping the monetary policy priorities for 2025.

8.
The consultative meetings revealed broad acceptance of the ZiG by the market. The
stakeholders commended the relative stability of the ZiG and implored the Reserve
Bank to continue to stay the course of tight monetary policy to enhance confidence
in the local currency and increase its usage, while ensuring adequate liquidity to
support economic activity. Stakeholders highlighted that building confidence in the
local currency would take time and required consistent policies, and walking the
talk in implementing policies that promote price, currency and exchange rate
stability.

1 The key stakeholders included the Bankers Association of Zimbabwe (BAZ), Confederation of Zimbabwe Industries
(CZI), Confederation of Zimbabwe Retailers (CZR), Retailers Association of Zimbabwe (RAZ), Chamber of Mines
(COM), Zimbabwe Council of Churches (ZCC), Zimbabwe Farmers’ Union (ZFU), Commercial Farmers' Union (CFU),
Zimbabwe National Chamber of Commerce (ZNCC), the Zimbabwe Tobacco Association (ZTA), The Asset Managers,
Transporters Associations, the CEO Africa Round Table, and Telecoms Operators Association of Zimbabwe (Econet,
Netone, Telecel, and Telone) , Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ).

9.
Critically, stakeholders highlighted that policies that narrow the foreign exchange
premium, reduce inflation and the cost of banking services as well as improving
both the quantum and quality of ZiG bank notes would enhance confidence building
in the local currency.

10. The Reserve Bank broadly concurred with the insightful submissions by
stakeholders and is convinced that consolidating price and exchange rate stability is
a pre-condition for enhancing confidence in the use of the local currency. In this
regard, the Monetary Policy thrust aims to consolidate the gains of the ZiG to date
considering the vulnerabilities and fragilities in the interbank foreign exchange
market and the liquidity conditions.

11. The Reserve Bank will continue with the tight monetary policy stance whose
overarching objective is to foster Central Bank policy credibility and trust under the
Back-to-Basics Strategy. In this regard, the monetary policy strategy will be
anchored on three interwoven strategic pillars which are (i) Consolidating Price,
Currency and Exchange Rate Stability; (ii) Enhancing Monetary Stability,
Research, Policy and Data Integrity; and (iii) Maintaining Safety, Soundness and
Integrity of the Financial Sector.

12. This Monetary Policy Statement outlines the policy stance of the Reserve Bank
during the first half of 2025, informed by the above three strategic pillars.

13. The subsequent sections of the Monetary Policy Statement are presented as follows:
•
Section 2: Monetary and Financial Conditions
•
Section 3: Recent Economic Developments
•
Section 4: External Sector Developments
•
Section 5: Condition and Performance of the Banking Sector
•
Section 6: New Monetary Policy Measures
•
Section 7: Economic Outlook
•
Section 8: Conclusion

SECTION TWO
MONETARY AND FINANCIAL CONDITIONS

14. The Monetary Policy measures implemented by the Reserve Bank since the
introduction of the ZiG have delivered exchange rate and inflation stability. This
largely reflects the effectiveness of the Reserve Bank’s tight monetary policy stance
sustained since April 2024.

15. The tight monetary policy stance was further consolidated in September 2024 to
address attendant risks to inflation and exchange rate stability through the upward
review of the Bank Policy Rate and statutory reserves. This resulted in the
dissipation of inflationary pressures since October 2024. Monthly ZiG inflation,
therefore, declined from a peak of 37.2% in October 2024, to 3.7% in December
2024. The decline mainly reflected stability in the exchange rate, as evidenced by
the significant narrowing of parallel market premiums. The Reserve Bank remains
committed to ensuring sustained price stability that has been experienced in the last
quarter of 2024.

Exchange Rate Developments
16. The interbank exchange rate and the parallel exchange rate remained stable since
October 2024. The exchange rate premium has been contained since October 2024.
Figure 1 shows the evolution of the interbank and parallel market exchange rates
and the premium for the period from 15 April 2024 to 23 January 2025.

Figure 1: ZiG/US$ Exchange Rates and Premium April 2024 to Jan 2025

Source: RBZ and Market Intelligence Surveys, 2025

17. The stability in the exchange rate has gone a long way in supporting the
disinflation trend witnessed during the last quarter of 2024.

Interest Rates
18. The Monetary Policy Committee (MPC) reviewed the Bank Policy Rate from 20%
to 35% effective 27 September 2024, to curtail exchange rate and inflation
pressures. Concomitantly, minimum and maximum corporate lending rates
increased from 24.2% to 40% and 32.4% to 45.6%, respectively. Figure 2 shows the
developments on the Bank Policy Rate, vis-a-vis lending rates since the introduction
of the ZiG in 2024.

19. Following the upward review of the Bank Policy Rate, the overnight
accommodation rate rose to 40%, in line with the Reserve Bank’s tight monetary
stance. The overnight accommodation window remains available to assist banks
facing liquidity challenges. There was minimal reliance on the lender of last resort
facility as most banks relied on the liquidation of NNCDs to meet their liquidity
needs.


13-Apr-24
28-Apr-24
13-May-24
28-May-24
12-Jun-24
27-Jun-24
12-Jul-24
27-Jul-24
11-Aug-24
26-Aug-24
10-Sep-24
25-Sep-24
10-Oct-24
25-Oct-24
09-Nov-24
24-Nov-24
09-Dec-24
24-Dec-24
08-Jan-25
23-Jan-25
Exchang eRates
PREMIUM (%)
INTERBANK RATE
PARALLEL RATES (Transfer)

Figure 2: Bank Policy Rates and Versus Lending Rates (%)

Source: Reserve Bank of Zimbabwe, 2025
20. The monetary policy measures also assisted in slowing credit growth, thereby
impacting positively on inflation and the exchange rate. Figure 3 shows weekly
changes in ZiG loans.
Figure 3: Weekly Change in ZiG Loans
Source: Reserve Bank of Zimbabwe, 2025

Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
Policy Rate (%)
Max_Ind_Weigh_Lending_rate
Max_Corp_Weigh_Lending_rate
Min_Ind_Weigh_Lending_rate
Min_Corp_Weigh_Lending_rate

10-Apr-24
10-May-24
10-Jun-24
10-Jul-24
10-Aug-24
10-Sep-24
10-Oct-24
10-Nov-24
10-Dec-24
10-Jan-25

Statutory Reserves
21. Statutory reserve requirements on both local and foreign currency deposits were
standardised at 30%, from 15% for demand and call deposits, and 15% for savings
and time deposits, up from 5%.

22. The adjustment of the statutory reserve requirements on 27 September 2024, further
tightened market liquidity, withdrawing around ZiG1.2 billion from the market. The
increase in statutory reserves and continued use of non-negotiable certificates of
deposit (NNCDs) enabled the Reserve Bank to maintain optimal money market
liquidity.

23. The Optimal Liquidity Level (OLL) which had been set at ZiG166.3 million in April 2024
was raised to ZiG500 million on 30 September 2024, in line with increases in the value of
transactions processed through the Zimbabwe Electronic Transfer and Settlement System
(ZETSS).

24. Reflecting the tight liquidity conditions during the last quarter of 2024, NNCDs
declined to as low as ZiG25 million on 13 November 2024 and have remained stable
within the envisaged thresholds.

Targeted Finance Facility
25. While the primary objective of the increase in the Bank Policy Rate and statutory
reserve requirements, was part of the Reserve Bank’s tight monetary policy stance
it, however, resulted in constrained liquidity. To balance stability and economic
growth, the Reserve Bank introduced the Targeted Finance Facility (TFF) funded
from the statutory reserves of banks, to increase lending to productive sectors by
banks. Funded from the statutory reserves already held at the Reserve Bank, the
TFF is geared at augmenting lending by banks.

Gold and Foreign Currency Reserves
26. Since April 2024, the Reserve Bank embarked on a reserves accumulation strategy
comprising of foreign currency and precious metals (mainly gold), from mining
royalties, direct currency purchases from the interbank market and outright gold
purchases. The reserves accumulation strategy is centred around ensuring that, at
any point, the ZiG component of reserve money is fully backed.

27. Consequently, the total holdings of gold and foreign reserves have since increased
by 87%, from US$285 million in April 2024 to around US$550 million as at end of
January 2025. This has also ensured the full coverage of the total ZiG deposits in
the economy of around ZiG13 billion, thereby supporting the Reserve Bank’s
currency and exchange rate stability objectives.

28. Figure 4 shows the foreign currency reserve cover of ZiG reserve money and
deposits.

Figure 4 : Foreign Currency Reserve Cover of ZiG Reserve Money and
Deposits

Source: Reserve Bank of Zimbabwe, 2025

5 Apr 24
31-May-24
5-Jul-24
20-Sep-24
16-Oct-24
29-Oct-24
31-Oct-24
4-Nov-24
7-Nov-24
13-Nov-24
15-Nov-24
19-Nov-24
2-Dec-24
5-Dec-24
9-Dec-24
12-Dec-24
16-Dec-24
18-Dec-24
24-Dec-24
30-Dec-24
2-Jan-25
6-Jan-25
8-Jan-25
10-Jan-25
14-Jan-25
16-Jan-25
20-Jan-25
22-Jan-25
ZiG' Billion
ZiG Reserve Money
ZiG Deposits (Mkt )
Reserve Cover

29. Based on the current trends of foreign exchange inflows, including in-kind royalties,
the reserve accumulation strategy for 2025 will result in a significant improvement
in foreign reserves holdings at the Reserve Bank.

Foreign Exchange Market
30. Improved exchange rate flexibility on the WBWS foreign exchange market has
fostered a market-driven and transparent exchange rate management system, while
improving the accessibility of foreign currency in the market.

31. The Reserve Bank has been strategically intervening in the WBWS foreign
exchange market, by injecting foreign currency, when necessary, to ensure that
there is sufficient liquidity to meet market demand using export surrender proceeds.

32. The Reserve Bank sold a total of US$407.4 million on the WBWS platform from
April to December 2024. The foreign currency uptake by banks on the WBWS
averaged 70%, largely due to tight ZiG liquidity conditions.

33. The Reserve Bank continues to intervene in the interbank foreign exchange market,
with about US$35 million having been injected in January 2025.

Key Monetary and Financial Indicators
34. The Reserve Bank considers communication as an important monetary policy tool
to anchor inflation and exchange rate expectations. As such, the Reserve Bank will
regularly publish key indicators underpinning the foregoing monetary and financial
conditions. The indicators for the period April 2024 to January 2025, are shown in
Table 1.

Table 1: Key Monetary and Financial Statistics


30-Apr-24
30-Jun-24
30-Sep-24
31-Oct-24
30-Nov-24
31-Dec-24
31-Jan-25
Inflation


ZiG Month-on-Month (%)

USD Month-on-Month (%)


Monetary


Reserve Money (ZiG Million)


Total ZiG Deposits – (Million)

Reserve Cover (ZiG Million)

Financial Sector


Non-Performing Loans Ratio
(Benchmark=5%)2
N/A
2.02
3.19
N/A
N/A
3.37
N/A
Money Market


Market Position (including
NNCDs) (ZiG Million)
1,602
1,781

1,900
1,445

External Sector


Cash and Nostro Balances
(US$ million)

Gold Holdings Kgs

Gold Holdings Value (USD
millions)

Other Reserves (In kind
mineral royalties)

Total Reserve Covering ZiG
(US million)

Average Pipeline Forex
Demand (USD million)

WBWS Exchange Rate

Implied Exchange Rate (ZiG
Bank Deposits- over Foreign
Currency Reserves)

Source: Reserve Bank of Zimbabwe, 2025

35. As shown in Table 1, the Reserve Bank has been pursuing prudent money supply
management with reserve money kept under control and not exceeding the targeted
ZiG4 billion for 2024.


2 N/A= Data not available monthly but quarterly.

36. The Reserve Bank’s foreign reserves accumulation strategy in 2024, has resulted
in its gold holdings increasing from 1.5 tonnes to 2.7 tonnes. The monetary value
of gold together with other foreign currencies ended the year at over half a billion
US dollars which is more than three times cover of reserve money.

37. The pipeline demand reflects the amount of foreign currency invoices submitted
to banks by their customers, for foreign payments which awaits payment. Since
June 2024, the value of pipeline demand has averaged US$15-20 million per week,
an amount that the Reserve Bank has been clearing using the intervention
resources accumulated to date.

SECTION THREE
RECENT ECONOMIC DEVELOPMENTS

GLOBAL DEVELOPMENTS
Economic Growth
38. The post-pandemic recovery in global output continued to exhibit resilience, with
growth holding steady and the progressive decline in inflation facilitating a softlanding.

39. As such, monetary easing continued to support growth recovery in both Advanced
Economies (AEs) and Emerging Market and Developing Economies (EMDEs).
Nevertheless, regional divergences persist, and the medium-term outlook remains
benign, characterised by below average growth.

40. Importantly, uncertainties dominate the outlook owing to heightened geo-political
tensions and trade policy shifts, as well as elevated global public debt levels that
threaten to trap the global economy in a low growth-high debt mode.

41. Against this background, the IMF’s October 2024 World Economic Outlook and
its January 2025 update, projected that global growth would firm up slightly, from
3.2 percent in 2024 and stabilise at 3.3 percent in 2025 and 2026, as shown in
Figure 5.

Figure 5: Global Growth 2019 to 2026

Source: IMF World Economic Outlook, January 2025 Update

42. Looking ahead, the global growth outlook remains conditioned by downside risks
from resurgent price pressures, intensified protectionism and heightened trade
policy uncertainty, as well as climate related natural disasters. Furthermore,
renewed fiscal pressures and currency volatility in Emerging Market Economies
remain a concern. In Advanced Economies, growth is expected to rise from 1.7
percent in 2024 to 1.9 percent in 2025. The expansion of economic activity in AEs,
however, masks divergent growth forecasts between the US and the Euro-Area.

43. In the US, growth projections were revised upwards to 2.7 percent for 2025
underpinned by robust aggregate demand, a less restrictive monetary policy
stance, favourable financial conditions, and stronger investment. In the Euro-Area,
growth is expected to gradually firm-up from 0.8 percent in 2024 to 1.0 percent in
2025, with performance weighed by geo-political tensions, weaker market
sentiment, underwhelming manufacturing sector performance particularly in
Germany and heightened policy uncertainty. More generally, the scarring effects
of the recent energy price shock continue to weigh on growth prospects in Europe.

44. Growth performance in EMDEs is estimated to have remained subdued at 4.2
percent in 2024 and is expected to remain stable in 2025. This largely reflects the
growth constraining effects of elevated trade and policy uncertainty, alongside low
-20
-10

2024E
2025F
2026F
Global Growth
AEs
EMDEs
SSA

demand. While the stimulus package measures enunciated by the Chinese
authorities in November 2024 brought optimism, the property market drag, and
subdued consumption continued to dampen growth performance to below
potential levels. In India, growth is expected to remain robust and stable at 6.5
percent in 2025 and 2026.

45. In Sub- Saharan Africa (SSA), real GDP growth is estimated at 3.8 percent in 2024
and projected to recover to 4.2 percent in 2025 and remain broadly stable in 2026.
The growth recovery reflects the waning effects of prior adverse weather shocks
induced by the El Nino phenomenon, as well as the gradual easing of supply chain
bottlenecks.

46. Notably, SSA growth performance reflects the expansion of activity in SSA
region’s largest economies —South Africa and Nigeria. South Africa’s growth is
expected to rise from 0.8 percent in 2024 to 1.5 percent in 2025, benefiting from
improved power supply and easing inflation.

47. In Nigeria, growth is projected to rise from 2.9 percent in 2024 to 3.1 and 3.2
percent in 2025 and 2026, respectively, spurred by improved services sector
activity and enhanced business confidence. Nonetheless, growth in Sub-Saharan
Africa remains insufficient to raise per-capita income, narrow attendant income
gaps and foster sustained and inclusive economic development.

48. Going forward, growth prospects in SSA remain challenged by multiple
headwinds from the recurrence of devastating climate shocks, food and energy
insecurity, spillovers from regional conflicts, volatile global financial and
commodity markets, as well as the funding squeeze and liquidity stress.

49. Meanwhile, high debt service costs continue to crowd-out priority social and
investment spending, further diminishing fiscal space. At the same time, inflation
remains above target in many countries, with rising social tensions posing
challenges for necessary macroeconomic adjustments. In addition, an escalation

of conflicts in Sudan and in the Middle East, could trigger energy and food price
inflation in the region, while high global interest rates could further compound
debt vulnerabilities.

Global Inflation
50. Global inflation continued on a downward path, with progress stalling in some
countries, while services inflation remained high in other countries.

51. The general decline in global inflation reflected the dampening effects of
synchronised monetary tightening, with the recent declining nominal wage growth
and normalisation of labour markets, providing additional disinflation impetus.

52. It is against this background that global inflation declined from 6.7 percent in 2023
to 5.7 percent in 2024 and is projected to decline further to 4.2 percent and 3.5
percent in 2025 and 2026, respectively. Nevertheless, pockets of elevated inflation
remain mostly in EMDEs, developing Europe and Latin America.

53. In the SSA region, inflation remained in double digits in many countries owing to
currency pressures and high food prices reflecting the repercussions of adverse
weather conditions on food supply and prices. Figure 6 shows the general decline
in global inflation.
Figure 6: Global Inflation 2019 to 2026

Source: IMF World Economic Outlook, January 2025 Update

2024E
2025F
2026F
Global
AEs
EMDEs
SSA

54. Despite the notable disinflation strides, the hard-won gains are challenged by
renewed risks from the energy price shock, appreciation of the US dollar and the
uncertain price effects of tariffs.

55. Moreover, inflation expectations in advanced economies have drifted significantly
above central bank targets, signaling a real risk of de-anchoring. At the same time,
capital flow reversals occasioned by divergent monetary policy paths could exert
additional currency and inflationary pressures. Further, commodity price spikes
could be detrimental to current disinflation efforts.

56. Meanwhile, global financial conditions remain largely accommodative despite
heightened policy uncertainties. Nonetheless, financial conditions in EMDEs have
slightly tightened against the backdrop of the dollar appreciation prompted by
expectations of new tariffs and higher interest rates in the US.

57. In parallel, fiscal and inflation concerns in advanced economies are expected to
exert undue pressure on long term rates, which further compounds the cost of
borrowing in EMDEs.

58. Considering the significant challenges facing the global economy, policymakers
are focusing on balancing the important trade-offs between inflation and economic
activity. Concurrently, calls have strengthened to replenish fiscal buffers, fortify
the foundations for growth through scaled-up structural reform efforts and efforts
to strengthen global cooperative efforts to safeguard the benefits of multilateral
trade.

Global Price Developments for Selected Commodities
Gold
59. Gold prices remained buoyant in 2024, reaching a peak of US$2,700 per ounce in
October 2024, as shown in Figure 7. The uptick in gold prices reflected heightened
geopolitical tensions, sustained demand from central banks, and the onset of U.S.

monetary policy easing. Central banks in EMDEs increased their gold holdings in
2024 as they diversified their international reserve portfolios away from the dollar.
Continued safe-haven demand for gold, on the back of geopolitical tensions, and
financial and policy uncertainties, will likely sustain the higher gold prices in the
near term.

Figure 7: Gold Prices US$/Oz January 2023 to December 2024


Source: World Bank Commodity Prices, 2024

Platinum Group of Metals (PGMs)
60. PGMs prices remained subdued in 2025 as shown in Figure 8, largely reflecting
slowing activity in the automotive sector, as the energy transition to renewables
gains momentum. In the outlook period, the demand for PGMs is likely to remain
subdued owing to the shifting structure of the automative sector against the growth
in the electric vehicles sub-sector. These developments will weigh down prices,
with negative spillovers to Zimbabwe’s export proceeds.


Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Mar-24
Jun-24
Sep-24
Dec-24
Mar-25
Jun-25
Sep-25
Dec-25
Mar-26
Jun-26
Sep-26
Dec-26

Figure 8: PGMs Prices US$/Oz


Source: Johnson Matthey, 2025

Brent Crude Oil

61. Oil prices declined by 2.3%, from US$82.6/barrel in 2023 to US$80.7/barrel in
2024. Strong global growth in the production of oil, against subdued demand
exerted downward pressure on prices. Nevertheless, heightened geopolitical risks
in the Middle East, and continued voluntary production restrictions
among Organisation of Petroleum Exporting Countries (OPEC+) members,
partially supported the prices. The economic weaknesses and concerns about
subdued oil consumption in China are expected to continue weighing down prices
in 2025, as shown in Figure 9.

Figure 9: Brent Crude Oil

Source: World Bank Commodity Prices, 2024
-


Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Mar-24
Jun-24
Sep-24
Dec-24
Mar-25
Jun-25
Sep-25
Dec-25
Mar-26
Jun-26
Sep-26
Dec-26
Platinum
platinum forecast
Palladium
palladium forecast

Jan-19
May-19
Sep-19
Jan-20
May-20
Sep-20
Jan-21
May-21
Sep-21
Jan-22
May-22
Sep-22
Jan-23
May-23
Sep-23
Jan-24
May-24
Sep-24
Jan-25
May-25
Sep-25
Jan-26
May-26
Sep-26

REAL SECTOR DEVELOPMENTS
62. The economy is estimated to have grown by 2% in 2024, mainly due to the poor
performance of the agriculture sector, occasioned by the severe drought. In 2025,
however, the economy is expected to rebound and grow by 6% owing to an
improved agricultural season. In addition, the prevailing price and exchange rate
stability is expected to underpin the envisaged growth trajectory.

MONETARY DEVELOPMENTS

Reserve Money Developments
63. Total reserve money, inclusive of foreign currency statutory reserves, stood at
ZiG20.40 billion as at 31 December 2024. This largely reflect an expansion in the
foreign currency component of reserve money in September 2024, following the
upward review in statutory reserves.

64. The local currency component of reserve money, which the Reserve Bank tracks
for monetary policy purposes, has been stable, increasing from ZiG3.3 billion in
October 2024 and to ZiG3.5 billion in December 2024. This followed the tight
monetary policy stance pursued by the Bank during the last quarter of 2024.

65. Consistent with the target of 5% month-on-month inflation set by the Bank for
2024, the local currency component of reserve money was successfully contained
at below the target of ZiG4 billion, which saw inflation falling to 3.7% by 31
December 2024. Looking ahead, the tight monetary policy stance will be
maintained in 2025, to consolidate the gains achieved in 2024.

Figure 10: Components of Reserve Money (31 December 2024)


Source: Reserve Bank of Zimbabwe, 2024

66. The reserve money stock as at 31 December 2024 largely comprise of foreign
currency statutory reserves, 67.38%, and foreign currency excess reserves, at
15.30%, as shown in Figure 10.

Broad Money Developments
67. Broad money (M3) amounted to ZiG87.45 billion in December 2024, largely due
to the foreign currency component of deposits, which constituted 83% of total
deposits as shown in Figure 11. The growth in money supply, reflected
fluctuations in the exchange rate, particularly the significant once-off depreciation
in September 2024.
Figure 11: Foreign Currency and Local Currency Deposits

Source: Reserve Bank of Zimbabwe, 2025
Local Currency Issued
0.89%
ZiG Statutory Reserves
14.48%
Foreign Currency Statutory
Reserves
67.38%
ZiG Excess Reserves
1.95%
Foreign Currency
Excess Reserves

19-Apr-24
03-May-24
17-May-24
31-May-24
14-Jun-24
28-Jun-24
12-Jul-24
26-Jul-24
09-Aug-24
23-Aug-24
06-Sep-24
20-Sep-24
04-Oct-24
18-Oct-24
01-Nov-24
15-Nov-24
29-Nov-24
13-Dec-24
27-Dec-24
10-Jan-25
Foreign Currency
Local Currency

68. Following the tightening of monetary policy, growth in the local currency
component of broad money fell significantly, from 16% in May 2024 to 9% in
December 2024. This significantly contributed to the relative stability in the
exchange rate, with positive benefits to inflation.

69. Figure 12 shows the monthly developments in the local currency component of
money supply, since the launch of the re-calibrated Monetary Policy Statement, in
April 2024.

Figure 12: Month-on-Month Growth in Broad Money (May - December 2024)

Source: Reserve Bank of Zimbabwe, 2025

70. Money supply growth as at 31 December 2024 was underpinned by the increase
in domestic credit to ZiG74.54 billion in December 2024, from ZiG38.04 billion
in June 2024. The expansion in domestic credit due to the growth in credit to the
private sector, from ZiG26.71 billion to ZiG55.48 billion, was largely in the form
of loans and advances. Over the same period, net claims on Government increased
from ZiG9.91 billion to ZiG17.32 billion.

71. Loans and advances to the private sector were largely driven by the foreign
currency component, which accounted for 88% of total credit, partly explained by
movements in the exchange rate. The ZiG loans-to-deposits ratio increased from
30% in April 2024 to 50% in December 2024, while the USD loans-to-credit ratio

May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24

rose marginally, from 56.88% to 59.41% over the same period. Evidently, the local
currency portfolio of bank loans has been increasing since the beginning of the
implementation of the re-calibrated monetary policy framework in April 2024, as
shown in Figure 13.

Figure 13: Loan to Deposit Ratio (5 April 2024 – 10 January 2025)

Source: Reserve Bank of Zimbabwe, 2025

72. The proportion of local currency loans to total loans, which declined to 9.69%
after the depreciation of exchange rate on 27 September 2024, had increased to
11.46% by the week ending 10 January 2025.

Figure 14: Foreign and Local Currency Loans

Source: Reserve Bank of Zimbabwe, 2025

19-Apr-24
03-May-24
17-May-24
31-May-24
14-Jun-24
28-Jun-24
12-Jul-24
26-Jul-24
09-Aug-24
23-Aug-24
06-Sep-24
20-Sep-24
04-Oct-24
18-Oct-24
01-Nov-24
15-Nov-24
29-Nov-24
13-Dec-24
27-Dec-24
10-Jan-25
Foreign Currency
Local Currency
Aggregate

19-Apr-24
03-May-24
17-May-24
31-May-24
14-Jun-24
28-Jun-24
12-Jul-24
26-Jul-24
09-Aug-24
23-Aug-24
06-Sep-24
20-Sep-24
04-Oct-24
18-Oct-24
01-Nov-24
15-Nov-24
29-Nov-24
13-Dec-24
27-Dec-24
10-Jan-25
Foreign Currency
Local Currency

STOCK MARKET DEVELOPMENTS
Zimbabwe Stock Exchange (ZSE)
73. In line with the tight liquidity conditions that prevailed in the economy since
October 2024, the ZSE was characterised by bearish sentiment during the last
quarter of 2024. Market capitalisation declined from ZiG 89.6 billion in October
2024 to close the year at ZiG 66.2 billion, as shown in Figure 15.
Figure 15: ZSE Market Capitalization (ZW$ billions)

Source: Zimbabwe Stock Exchange, 2024

74. The bearish conditions on the ZSE since October 2024 were also discernible from
the various sub-indices, as shown in Figure 16.

Figure 16: Zimbabwe Stock Exchange All Share, Top 10 and Mining Indices

Source: Zimbabwe Stock Exchange, 2024

Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24


Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
All Share Index
Top 10 Index
Mining Index

Victoria Falls Stock Exchange (VFEX)
75. The Victoria Falls Stock Exchange (VFEX) All Share Index was relatively stable
since the second half of 2024, as shown in Figure 17.

Figure 17: Victoria Falls Stock Exchange All Share Index

Source: Victoria Falls Stock Exchange, 2024

INFLATION DEVELOPMENTS
76. Monthly ZiG inflation declined, following the monetary policy measures
introduced on 27 September 2024. Monthly inflation decelerated by 8.0
percentage points, from 11.7% in November 2024 to 3.7% in December
2024, driven by both food and non-food inflation. The decline in inflation
was attributed to the stability in the monetary conditions which dampened
inflationary pressures.

77. Monthly ZiG inflation stood at 10.5% in January 2025 mainly driven by a
once-off huge increase in rentals of 51.6%. The weight of the rentals
subcategory is 19.83% of the total CPI basket. The high increase in rental
inflation in January 2025 resulted in the subcategory contributing 6.3% of
the headline month-on-month inflation of 10.5% which is 60.2%. All other
subcategories increased moderately, as shown in Figure 18.

Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24

Figure 18: CPI Categories Monthly Inflation Changes (Dec 2024- Jan 2025)


Source: ZIMSTAT, 2025

78. On average from May 2024 to January 2025, transport, and housing, water,
electricity, gas and other fuels and transport were the largest contributors to
monthly non-food inflation, as shown in Figure 19.

Figure 19: ZiG Contributions to Non-food inflation (May 2024 to Jan 2025)


Source: ZIMSTAT, 2025

79. Consequent to the broad-based decline in inflation since October 2024, all
other price indices in the economy declined. These include the Producer
Price Index (PPI), Producer Price Index Agriculture (PPIA), Civil

Food & non-alcoholic beverages
Alcoholic beverages & tobacco
Clothing & footwear
Actual rentals for housing
Electricity, gas and other fuels
Water supply and miscellaneous services relating to...
Maintenance and repair of the dwelling
Furniture and equipment
Health
Transport
Communication
Recreation and culture
Education
Restaurants and hotels
Overall CPI

May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
Jan-25
ALCOHOLIC BEVERAGES & TOBACCO
CLOTHING & FOOTWEAR
HOUSING, WATER, ELECTRICITY, GAS & OTHER FUELS
FURNITURE AND EQUIPMENT
HEALTH
TRANSPORT
COMMUNICATION
RECREATION AND CULTURE
EDUCATION
RESTAURANTS AND HOTELS
MISCELLANEOUS GOODS AND SERVICES

Engineering Materials Price Index (CEMPI) and Civil Engineering Plant
Price Index (CEPPI). Figure 20 shows the month-on-month ZiG inflation
rates for PPI, PPIA, CEMPI, CEPPI and CPI.

Figure 20: Month-on-Month ZiG Inflation Rates (May 2024 - Jan 2025)

Source: Reserve Bank of Zimbabwe, 2025

80. Prices in US dollars remained low and stable since June 2023. In January
2025, however, month-on-month US$ inflation recorded large monthly
increase of 11.5% in January 2025 up from 0.6% in December 2024. This
was driven in part by food inflation which registered an increase of 16.9%,
contributing 5.3 percentage points to total inflation. Figure 21 shows the
USD Annual inflation from January 2023 to January 2025.

Figure 21: USD Annual CPI Inflation Jan 2023 to Jan 2025

Source: Reserve Bank of Zimbabwe, 2025
-10

May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
Jan-25
PPI
PPIA
CEMPI
CEPPI
CPI
-10
-5

Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
Jan-25

SECTION FOUR
EXTERNAL SECTOR DEVELOPMENTS

BALANCE OF PAYMENTS DEVELOPMENTS
Foreign Currency Receipts
81. Total foreign currency receipts for 2024 amounted to US$13 316.2 million,
representing a 21.0% increase from US$11 009.3 million received in 2023, as
shown in Table 2.

Table 2: Total Foreign Currency Receipts for 2023 and 2024 (US$ Millions)
Type of Receipt

% Change


Amount
(US$
Millions)
%
Contribution
Amount
(US$
Millions)
%
Contribution

Export
Proceeds


International
Remittances
Diaspora
Remittances

NGOs

Loan
Proceeds


Income
receipts


Foreign
Investment


TOTAL


Source: Reserve Bank of Zimbabwe, 2025
Current Account Developments
82. The improved foreign currency inflows resulted in improved current account
performance. Preliminary estimates indicate that the current account recorded a
surplus of US$501.2 million in 2024, representing a significant improvement
from a surplus of US$133.9 million recorded in 2023. This followed strong
remittance inflows and higher export growth relative to imports.

83. The current account surplus was, however, moderated by services and primary
income accounts that remained in deficit. Figure 22 shows developments in the
current account.
Figure 22: Current Account Developments (US$ millions)

Source: RBZ and ZIMSTAT Estimates, 2025

84. Merchandise exports stood at US$7.9 billion in 2024. The robust performance was
mainly driven by exports of gold and tobacco.

85. Mineral exports, which constituted the largest share of merchandise exports, grew
by 7.8%, from US$5.4 billion in 2023 to US$5.9 billion in 2024. Gold exports
recorded a remarkable increase of 37% to US$2.5 billion in 2024, from US$1.8
billion in 2023. This was largely driven by both higher production volumes and
favourable global gold prices. Gold purchases by Fidelity Gold Refiners (Private)
Limited (FGR) increased from 30.1 tonnes in 2023 to 36.5 tonnes in 2024,
representing a 21% growth illustrated in Figure 23.

-600
-400
-200

2022Q1
2022Q2
2022Q3
2022Q4
2023Q1
2023Q2
2024Q2
2024Q3
2024Q4
Trade Bal
Services Bal
Bal on Primary Income
Bal on secondary Income
Current Account Bal

Figure 23: Gold Purchases in Kgs (January to December 2024)

Source: Reserve Bank of Zimbabwe, 2025
86. The country’s import bill rose by 4.9%, from US$8.7 billion in 2023 to US$9.1
billion in 2024. This was driven by increases in imports of food, fuel, raw
materials, vehicles, and manufactured goods, as the economy continued to expand.

87. The food import bill rose significantly by 55.2%, from US$628.9 million in 2023
to US$976.1 million in 2024. This was underpinned by grain imports, necessitated
by the EL Nino-induced drought that adversely affected the 2023/24 agricultural
season. Maize imports increased from US$149 million in 2023 to US$574.6
million in 2024. While the overall import bill increased, moderating prices for
edible oils and fertilizers, partially offset the increase.

Transfers
88. Personal transfers increased by 18.1%, from US$2.2 billion in 2023 to US$2.6
billion in 2024. This was attributable to higher remittances, which positively
impacted on the current account balance.
Foreign Currency Payments
89. Total foreign currency payments funded through Authorised Dealers increased by
0.7% from US$9.3 billion in 2023 to US$9.4 billion recorded in 2024. Table 3
shows foreign payments by category.


Jan
Feb
Mar
Apr May
Jun
Jul
Aug
Sep
Oct
Nov Dec
US$ / Ounce
KGs
Gold Output_23
Gold Output_24
Price_23
Price_24

Table 3: Foreign Payments by Category in USD Millions (2023-2024)

% Variance Contribution

Contribution

Merchandise Imports (excl.
energy)

- Raw Materials & Intermediate
Goods

- Capital Goods

- Consumption & Finished
Manufactured Goods

Energy (Fuel & Electricity)

- Fuel

- Electricity

Service Payments

- Technical, Professional &
consultancy

- Software

- Other (tourism, edu, freight
etc)

Income Payments (Profits,
Dividends)

- Dividends

- Interest Payments

- Other (Salaries, Expats, Rental)

Capital Remittances (Outward)

- External Loan Repayments

- Disinvestments

- Foreign Investment

Other Payments

- Card Payments

- Refunds

Total

Source: RBZ (2024)

SECTION FIVE
CONDITION AND PERFORMANCE OF THE BANKING SECTOR

90. The financial soundness metrics as at 31 December 2024 indicate that the banking
sector remains safe and sound and continues to contribute to economic growth.
Table 4 shows the banking sector architecture.
Table 4: Banking Sector Architecture
Type of Institution
Number
Commercial Banks

Building Societies

Savings Bank (POSB)

Total Banking Institutions

Other Financial Institutions Under the Supervision of Reserve Bank
Credit-only-MFIs

Deposit-taking MFIs

Development Financial Institutions (SMEDCO, IDBZ, IDCZ and
AFC Land & Development Bank)

Total Other Institutions

Total Number of Institutions

Source: RBZ (2024)

91. Mukuru Financial Services Zimbabwe Limited was registered to conduct deposittaking microfinance business on 2 October 2024 and commenced operations on
17 December 2024.

Financial Soundness Indicators
92. The Banking sector recorded satisfactory financial performance during the year
ended 31 December 2024, as reflected by the key financial soundness indicators
depicted in Table 5.

Table 5: Financial Soundness Indicators
Key Indicators
Benchmark
Dec-23
(ZW$)
Mar-24
(ZW$)
Jun-24
Sep-24
Dec-24
Total Assets
-
ZW$34.41tn ZW$106.82tn ZiG77.55bn ZiG139.20bn ZiG161.39bn
Total Loans &
Advances
-
ZW$11.26tn ZW$40.09tn ZiG27.45bn ZiG51.41bn
ZiG55.93bn
Net Capital Base
-
ZW$7.77tn ZW$24.61tn ZiG16.45bn ZiG33.47bn ZiG38.29bn
Core Capital
-
ZW$6.31tn ZW$20.12tn ZiG14.02bn ZiG27.40bn ZiG33.42bn
Total Deposits
-
ZW$19.47tn ZW$6.65tn ZiG43.60bn ZiG76.10bn ZiG89.07bn
Net Profit
-
ZW$5.77tn ZW$14.77tn ZiG10.42bn ZiG20.57bn ZiG26.68bn
Return on Assets

Return on Equity

Capital Adequacy
Ratio


Tier 1 Ratio

Loans to Deposits Ratio

NPLs Ratio

Prudential Liquidity
Ratio

Source: RBZ (2024)

Banking Sector Capitalization
93. As at 31 December 18 out of 19 banking institutions reported core capital above
the minimum regulatory capital requirement, as shown in Table 6.
Table 6: Reported Core Capital as at 31 December 20243
Banking Institution
Reported Core Capital (ZiG)
US$ Equivalent (US$1:
ZiG25.7985)
Minimum Regulatory
Capital (US$)
CBZ Bank
6,156,382,138
238,633,336
US$30 million
Stanbic Bank
4,023,534,494
155,960,016
US$30 million
CABS
2,854,303,566
110,638,353
US$30 million
Ecobank Zimbabwe
2,648,821,301
102,673,461
US$30 million
ZB Bank
2,449,978,912
94,965,944
US$30 million
NMB Bank
1,943,473,064
75,332,793
US$30 million
Metbank Limited
1,924,919,838
74,613,634
US$30 million
FBC Bank
1,745,333,597
67,652,522
US$30 million
First Capital Bank
1,357,182,533
52,607,032
US$30 million
Nedbank Zimbabwe
1,306,855,641
50,656,264
US$30 million
AFC Commercial Bank
1,078,490,497
41,804,387
US$30 million
BancABC
1,041,825,905
40,383,196
US$30 million
Steward Bank
1,007,043,489
39,034,962
US$30 million
POSB
908,886,348
35,230,201
US$20 million*
FBC Crown
869,026,103
33,685,140
US$30 million
National Building Society
836,964,199
32,442,359
US$20 million
FBC Building Society
607,551,645
23,549,883
US$20 million
ZB Building Society
539,165,566
20,899,105
US$20 million
Source: RBZ (2024)

3 *POSB, which is established in terms of the POSB Act [Chapter 24:10] does not have minimum capital
requirements. The institution however benchmarks with tier II banking institutions that have a capital requirement
of ZiG equivalent US$20 million.

94. Time Bank, with a reported core capital of equivalent to US$4.52 million as at 31
December 2024, was authorised to commence limited commercial banking
activities (without taking deposits) in August 2022.

95. The Reserve Bank will leverage on the external audit reports in verification of the
declared capital positions submitted by banking institutions.

Banking Sector Asset Structure
96. Total banking sector assets increased from ZiG77.55 billion as at 30 June 2024 to
ZiG161.39 billion as at 31 December 2024. The asset mix remained skewed
towards loans & advances, which accounted for 31.39% of total banking sector
assets as at 31 December 2024 compared to 32.25% in June 2024, as shown in
Figure 24.

Figure 24: Asset Mix as at 31 December 2024

Source: Reserve Bank of Zimbabwe, 2024

Banking Sector Loans and Advances
97. As at 31 December 2024, aggregate banking sector loans and advances amounted
to ZiG55.93 billion, representing a 102% increase from ZiG27.45 billion reported
as at 30 June 2024. The increase was largely attributed to the revaluation of foreign
Domestic Notes & Coins
6.57%
Balances with Central Bank
18.11%
Balances with Domestic
Banks
3.15%
Assets in Transit
0.17%
Balances with Foreign
Institutions
5.50%
Securities & Investments
12.37%
Loans & Advances
31.39%
Foreign Claims
0.55%
Repossessed Assets
0.14%
Fixed Assets
9.05%
Other Assets
8.89%
Off-Balance Sheet Assets
4.10%

currency denominated loans, which accounted for 88.17% of the banking sector
aggregate loans. As at 20 January 2025, the loans and advances amounted to
ZiG50.33 billion.

98. The banking sector continued to support the funding requirements of the
productive sectors of the economy as evidenced by loans to the productive sectors,
which constituted 72.25% of total loans as at 31 December 2024. Figure 25 shows
the sectoral distribution of loans as at 31 December 2024.

Figure 25: Sectoral Distribution of Loans as at 31 December 2024

Source: Reserve Bank of Zimbabwe, 2024

99. Lending to productive sectors namely agriculture and manufacturing, accounted
for 14.72%, and14.94%, of total loans, respectively.
Asset Quality
100. Banking sector asset quality remained satisfactory. As at 31 December 2024, the
sector reported an aggregate non-performing loans to total loans ratio (NPL) of
3.37%, compared to 2.02% as at 30 June 2024. The ratio was within the
internationally acceptable threshold of 5%. Figure 26 shows the trend in the level
of NPLs from 31 December 2021 to 31 December 2024.
Individuals &
Households
25.51%
Other
2.24%
Productive Sectors
72.25%

Figure 26: Trend in Non- Performing Loans

Source: Reserve Bank of Zimbabwe 2024

Banking Sector Profitability
101. Banking sector aggregate profit amounted to ZiG26.68 billion (US$1.03 billion)
for the year ended 31 December 2024, representing a 6.95% increase from
US$944.37 million reported in the corresponding period in 2023. The income mix
for the sector is depicted in the Figure 27.
Figure 27: Banking Sector Income Mix as at 31 December 2024

Source: Reserve Bank of Zimbabwe 2024

Dec-21
Jun-22
Dec-22
Jun-23
Sep-23
Dec-23
Mar-24
Jun-24
Sep-24
Dec-24
NPL Ratio
Benchmark
Interest Income from
Loans & Advances,
13.46%
Interest Income on
Balances with Banks,
0.49%
Interest Income on
Investments &
Securities, 1.81%
Foreign Exchange,
11.79%
Fees and
Commission, 21.80%
Net Gains on
Revaluation of
Foreign Currency
Assets, 34.42%
Net Gains on
Revaluation of
Investment
Properties, 13.39%
Other Non Interest
Income, 2.84%

102. The return on assets and return on equity ratios were 24.72% and 65.62% as at 31
December 2024, compared to 23.97% and 68.99% as at 31 December 2023,
respectively.

Banking Sector Deposits and Liquidity
103. As at 31 December 2024 all banking institutions reported prudential liquidity
ratios which exceeded the regulatory minimum of 30%. The banking sector’s
average prudential liquidity ratio was 58.84%. This notwithstanding, limited
trading on the interbank market, resulted in temporary liquidity shocks for some
banking institutions, underscoring the need for effective liquidity risk
management.

104. Total banking sector deposits continued on an upward trajectory, increasing from
ZiG43.60 billion reported as at 30 June 2024 to ZiG89.07 billion as at 31
December 2024, mainly driven by translation of foreign currency denominated
deposits due to exchange rate movements. Foreign currency deposits accounted
for 86.17% of total deposits as at 31 December 2024. As at 20 January total
deposits amounted to ZiG86.75 billion.

Banking Sector Developments

Use of Artificial Intelligence in the Banking Sector
105. The role of Artificial Intelligence (AI) in banking is expected to continue growing
in the years to come. Against this background, the Reserve Bank will continue to
monitor and assess the use of AI based applications.

106. In the second half of 2024, the Bank conducted a survey to assess the financial
services sector’s adoption, application, and readiness for AI. Preliminary survey
results depicted a growing AI maturity, with many institutions establishing
foundational risk management and reporting systems, notably automated report

generation and real-time compliance tracking. Advanced tools, like predictive
compliance modelling and NPL for regulatory analysis, remain largely unadopted.

107. Overall, the banking and microfinance sectors are in the early stages of AI
governance, underscoring the need for clear, comprehensive AI strategies and
policies to guide its use in financial services.

Cyber Resilience

108. In 2024, the Reserve Bank conducted a cyber resilience assessment for the banking
and microfinance sectors to evaluate readiness against cyber threats. The
assessment indicated satisfactory cyber maturity across most institutions, with
well-established risk management systems safeguarding critical data and
supporting effective threat detection and response.

109. The survey noted that the majority of institutions have developed cyber resilience
strategies, while the rest are in the process of developing cyber resilience
strategies. It was also noted that the majority of the financial institutions are
carrying out cyber awareness programs.

110. The Reserve Bank will continue monitoring sector resilience and share specific
reports with the market to encourage adherence to best practices.

Sustainable Banking Practices

111. In light of the growing frequency and severity of climate-related events, including
droughts, floods, wildfires, and heatwaves, there is an increasing demand for
banking institutions to effectively manage financial risks while playing an active
role in promoting adoption of sustainable banking practices.

112. Against this background, the Reserve Bank continues to work closely with
financial institutions towards creating strong, resilient, and inclusive financial
institutions that contribute meaningfully to sustainable economic development.

113. As at 31 December 2024, 15 out of 19 banking institutions, two (2) development
finance institutions and one (1) deposit-taking microfinance institution were
undergoing the Sustainability Standards Certification Initiative (SSCI) program
being spearheaded by European Organisation for Sustainable Development
(EOSD). As such, banking institutions are at various stages of implementing the
modules under the SSCI certification program.

114. The Reserve Bank conducted a survey in December 2024 to assess progress by
banking institutions integrating sustainability issues into their business strategies,
governance and internal control systems.

115. The survey revealed that 56% of the banking institutions had successfully
integrated sustainability into their business models and had board members with
relevant expertise in sustainability, climate risk, or environmental, social, and
governance (ESG) issues.

116. In addition, 32% of the banking institutions reported to have board approved
sustainable finance policies or frameworks in place, while some of the institutions
have sustainability related matters covered in other existing policies.

Performance of the Microfinance Sector
117. The microfinance sector continues to play a critical role in promoting financial
inclusion, improvement of livelihoods and contributing to sustainable economic
growth.

118. The key performance indicators for microfinance sector (deposit-taking and creditonly microfinance institutions) over the period 31 December 2023 to 31
December 2024 is indicated in Table 7.

Table 7: Microfinance Key Performance Indicators
Source: Reserve Bank of Zimbabwe 2024

Microfinance Sector Capitalization
119. As at 31 December 2024, the microfinance sector registered an aggregate equity
of ZiG2.52 billion, up from ZiG1.20 billion as at 30 June 2024.

120. Of the eight (8) operating DTMFIs, four (4) were non-compliant with the new
minimum capital requirement of US$5 million for deposit-taking microfinance
institutions.


4 Portfolio at Risk [30] days-The value of all loans outstanding that have one or more instalments of
principal past due more than [30] days. This includes the entire unpaid principal balance, including both
the past due and future instalments, but not accrued interest. It also includes loans that have been
restructured or rescheduled.
Indicator
Dec 2023
Mar 2024
Jun 2024
Sept 2024
Dec 2024
Total Loans
ZW$741.61b ZW$2.76tn
ZiG2.14b
ZiG4,43b
ZiG4.94b
Total Assets
ZW$1.29tn ZW$4.80tn
ZiG3.49b
ZiG7.37b
ZiG8.30b
Total Equity
ZW$337.18b ZW$1.56tn
ZiG1.20b
ZiG2.36bn
ZiG2.52b
Net Profit
ZW$221.92b ZW$652.28b ZiG358.57m ZiG681.96m ZiG939.95m
Total Deposits
ZW$110.16b ZW$551.78b ZiG432.02m ZiG978.51m ZiG1.35b
Average Operational SelfSufficiency (OSS)

Portfolio at Risk (PaR>30 days)4

Number of Outstanding Loans

Number of Active Loan Clients

Number of Female Borrowers

Loans to Female Borrowers
ZW$293.32b ZW$2.84tn ZiG664.68m ZiG1.52 bn
ZiG1.75b
Number of Branches and
Agencies


121. Table 8 shows the capital levels for the operational DTMFIs as at 31 December
2024.

Table 8: DTMFIs Sub-sector Deposits and Liquidity

Institution
Core Capital 31.12.2024
(ZiG million)
Core Capital 31.12.2024
(US$ million) *
African Century Limited
256.04
9.92
Innbucks MicroBank
230.01
8.92
Success Microfinance Bank
176.92
6.86
Mukuru Financial Services
128.99
5.00
GetBucks Microfinance Bank
85.46
3.31
EmpowerBank Limited
24.34
0.94
Zimbabwe
Women’s
Microfinance Bank
34.62
1.34
Lion Microfinance Bank
25.95
1.01
Total
962.34
37.30
Source: Reserve Bank of Zimbabwe 2024

122. The DTMFIs subsector recorded an increase in deposits from ZiG432.02 million
as at 30 June 2024 to ZiG1.35 billion as at 31 December 2024, largely driven by
foreign currency deposits which accounted for 98% of the total microfinance
deposits.

123. As at 31 December 2024, all DTMFIs reported prudential liquidity ratios above
the prudential minimum threshold of 30%.

FINANCIAL INCLUSION
124. The Reserve Bank continues to spearhead the implementation of the National
Financial Inclusion Strategy (NFIS) II, through partnerships and collaborations
with key stakeholders and implementing partners, to ensure an inclusive financial
sector in Zimbabwe.

Financial Inclusion Governance Structures
125. Zimbabwe adopted a consultative Governance and Coordination model
comprising the National Financial Inclusion Steering Committee, National
Financial Inclusion Technical Committee, National Financial Inclusion Secretariat
and Thematic Working Groups.

126. The operational financial inclusion governance structures which are critical to the
effective implementation and stakeholder buy-in of financial inclusion strategies
will commence in 2025.

Monitoring & Evaluation Framework Training
127. A comprehensive and robust financial inclusion data base, disaggregated by
gender, age, disability and geographic area, is critical in informing financial
inclusion initiatives and interventions. In this regard, the Financial Inclusion
Monitoring and Evaluation Framework (M&E) has been finalised, with the
financial inclusion dashboard that now includes disaggregated financial inclusion
data on all targeted segments.

128. The financial inclusion dashboard will be used to monitor progress with regards
to the effectiveness of the various financial inclusion initiatives on the level of
uptake and usage of financial services by the marginalised and underserved target
groups.

Survey on Women Participation in Decision Making
129. The Reserve Bank continues to promote gender diversity as part of women
empowerment programs. In pursuit of fulfilment of the Maya Declaration and the
Denarau Action Plan to promote gender equality and women empowerment, the
Reserve Bank carried out a survey in 2024 to ascertain the proportion of women
in decision making positions within banking and microfinance institutions.

130. The results of the survey conducted point to low level of women in decisionmaking levels in the banking and microfinance sectors. Results for 51 financial
institutions that responded to the survey are shown in Figure 28.

Figure 28: Survey Results on Gender Diversity in the Financial Sector


Source: Reserve Bank of Zimbabwe 2024
131. Under-representation of women in decision-making roles has the potential to limit
diverse perspectives and innovative financial solutions to challenges faced by
women.

132. Against this background, banks, deposit-taking and credit-only microfinance
institutions are encouraged to take steps to ensure gender diversity.

Savings and Credit Cooperative Society (SACCOS)
133. SACCOs are critical in facilitating financial inclusion and inculcating a savings
culture at grassroots level.

Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Board of
Directors (Non -
Executive
Directors)
Chief Executive
Officer/Managing
Director
Executive
Management
Middle
Management
Supervisors
Non-managerial
Entry Level
Graduate Trainees

134. Given the importance of SACCOs and the potential impact on financial stability,
the availability of data is essential for enhanced oversight in the sector. In this
regard, the Reserve Bank will continue to collaborate with the relevant
stakeholders.

Financial Inclusion of Forcibly Displaced Persons (FDPS)
135. In line with developments in other jurisdictions, plans are underway to incorporate
forcibly displaced persons as part of the target segments in the National Financial
Inclusion Strategy.


Financial Inclusion Indicators
136. Table 9 highlights key Financial Inclusion Indicators.

Table 9: Financial Inclusion Indicators

Indicator

Sept 23
Dec 23
Mar 24
June 24
Sept24
Dec 24
Number of Loans to MSMEs

Value of loans to MSMEs
ZW$387.13bn
ZW$583.75bn
ZW$1,71tn
ZiG1.55bn
ZiG
3.24bn
ZiG
5,45bn
Average loans to MSMEs as
% of total bank loans

Number of Loans to Women

Value of Loans to Women
ZW$448.39bn
ZW$912.75bn
ZW$3.04tn
ZiG2.38bn
ZiG4.22bn
ZiG
4.90bn
Average loans to women as a
% of total bank loans

Number of Loans to Youth

Value of Loans to Youth
ZW$329.79bn
ZW$370.51bn
ZW$1.41tn
ZiG1.19bn
ZiG2.89bn
ZiG2.76bn
Average loans to the youth as
a % of total bank loans

Total number of Active Bank
Accounts (Million)

Number of Low-Cost Bank
Accounts (Million)

Source: Reserve Bank of Zimbabwe, 2025

137. The on-going implementation of the National Financial Inclusion Strategy II
continues to witness significant inroads into the financial inclusion of the
marginalised target groups namely the micro, small and medium enterprises,
women and youth as reflected by the financial inclusion indicators during the
period from September 2023 to December 2024.

CREDIT INFRASTRUCTURE

Credit Registry
138. Financial institutions and other stakeholders continued to utilise the Credit
Registry and private credit bureaus during the year to December 2024. The credit
information sharing environment facilitates effective credit risk management and
decision-making which ultimately fosters financial inclusion and promote
financial stability.

139. As at 31 December 2024, all the credit reporting institutions maintained 23.51
million searchable records. The distribution of credit records by institution is
shown in Figure 29.

Figure 29: Cumulative Loan Records per Credit Reporting Institution


Source: Reserve Bank of Zimbabwe, 2025

FCB
Credit Registry
XDS
Fincheck

Number of Loan Records
(Millions)

140. In addition, the distribution of inquiries across credit reporting institutions is
illustrated in the Figure 30.

Figure 30: Distribution of Inquiries per Credit Reporting Institution

Source: Reserve Bank of Zimbabwe 2024

141. As at 31 December 2024, statistics from the Credit Registry reveal a 27.76%
increase in cumulative inquiries, rising from 4,085,598 on 31 December 2023, as
shown in Figure 31.

Figure 31: Cumulative Credit Registry Usage Status

Source: Reserve Bank of Zimbabwe, 2024
FCB
39.58%
Credit Registry
53.93%
XDS
5.37%
Fincheck


Dec-23
Mar-24
Jun-24
Sep-24
Dec-24

142. |Figure 32 shows the distribution of loans to individual borrowers by age and
gender in the Credit Registry database as at 31 December 2024.

Figure 32: Distribution of Loans Age & Gender

Source: Reserve Bank of Zimbabwe, 2024
Collateral Registry
143. As at 31 December 2024, there were 2,481 active registrations in the Collateral
Registry with a total principal value of ZiG42.19 billion. Microfinance institutions
were the major users of the Collateral Registry with 1,185 registrations, followed
by banks with 1,135 entries. In terms of value of movable collateral, banking
institutions recorded a total of ZiG20.99 billion, while law firms registered a total
value of ZiG20.75 billion on behalf of clients, as shown in Figure 33.

Figure 33: Value of Registered Securities as at 31 December 2024

Source: Reserve Bank of Zimbabwe, 2024


Number of Loan Contracts
Number of Loan Contracts by Men
Number of Loan Contracts Women

ZWG20.998 billion
ZWG374.107
Million
ZWG20.748 billion
ZWG39.381 Million
ZWG34.647 Million
ZWG0.000 billion
ZWG5.000 billion
ZWG10.000 billion
ZWG15.000 billion
ZWG20.000 billion
ZWG25.000 billion

BANKING
INSTITUTIONS
MICROFINANCE
INSTITUTIONS
LAW FIRMS
CONTRACT
FINANCIERS
OTHER
CREDITORS
NUMBER OF ACTIVE SECURITY INTEREST NOTICES
PRINCIPAL AMOUNT (ZwG)

144. The Collateral Registry recorded a cumulative 4,516 security interest notices in
movable assets since commencement in November 2022, comprising 2,481 (55%)
active security interest notices, and 2,035 (45%) expired registrations as shown in
Figure 34.

Figure 34: Number of Security Interest Notices

Source: Reserve Bank of Zimbabwe, 2025

145. Lending institutions continue to expand the types of movable assets which qualify
as collateral. During the year to 31 December 2024 collateral included household
goods, private vehicles, trucks, agricultural equipment and shares, as shown in
Figure 35.

Figure 35: Types of Collateral as at 31 December 2024

*Other includes motorcycles, trailers and other movable assets that are yet to be classified in the Collateral
Registry system.
Source: Reserve Bank of Zimbabwe, 2024

ACTIVE
55%
EXPIRED
45%

11246910

3286111

205321

Other
Futures
Negotiable Instruments
Accounts Receivable
Stock of Raw Materials
Manufacturing Equipment
Industrial Equipment
Livestock
Agriculture Equipment
NGCBs
Household Goods

146. MFIs also registered the highest number of security interests searches as shown in
Figure 36.

Figure 36: Searches by Client as at 31 December 2024

Source: Reserve Bank of Zimbabwe, 2025

147. Within the agricultural sector movable assets pledged to secure loans were
dominated by Notarial General Covering Bonds (NGCBs) as at 31 December
2024, as shown in Figure 37.

Figure 37: Movable Collateral Pledged to Secure Agricultural Sector Loans

Source: Reserve Bank of Zimbabwe, 2024

Company
Individual
Contract
Financing
(e.g. contract
farming for
Cotton,
Tobacco etc)
Development
Finance
Institution
Law Firm
Public
Searches
Bank
Microfinance
Institution

NGCBs
Agriculture Equipment
Household Goods
Trucks
Saloon Cars
Livestock
Cession Agreement
Industrial Equipment
Buses
Stock of Raw Materials
Manufacturing Equipment
Construction Equipment
Other

NATIONAL PAYMENT SYSTEMS DEVELOPMENTS

148. During 2024, the payment system services sector demonstrated stability and
safety, with steady transaction growth indicating a healthy financial environment.
Figure 38 shows the payment system in Zimbabwe.

Figure 38: Payment Systems in Zimbabwe

Source: Reserve Bank of Zimbabwe, 2024
Real Time Gross Settlement System (RTGS)
149. The RTGS system was upgraded in November 2024, to ensure that the system
complies with ISO (International Organization for Standardization) 20022
standards. This was aimed at enhancing the efficiency, security, and effectiveness
of the system, ultimately benefiting financial institutions, customers and the
economy.

150. During 2024 the values of transactions processed through the RTGS System were
ZiG266.89 billion and US$29.02 billion, with volumes at 5.52 million and 5.83
million, respectively.

Access Devices and Points
151. All access devices, except for ATMs, recorded growth during the year 2024, as
shown in Table 10.

Table 10: Payment Access Points and Devices as of December 2024
PAYMENTS SYSTEMS ACCESS POINTS

Jul-24
Aug-24
Sep-24
Oct-24
Nov-24
Dec-24
ATMs

POS

MPOS

PAYMENTS SYSTEMS ACCESS DEVICES
Debit
Cards
5,791,591 5,810,174 5,872,074 5,853,971 5,849,894
5,866,859
Credit
Cards

Prepaid
Cards

Mobile
Money
Subscribers
9,680,737 9,762,205 9,955,399 9,937,069 9,886,704
9,959,866
Internet
Banking
Subscribers

Source: Reserve Bank of Zimbabwe, 2024
Interoperability
152. The interoperability values for retail digital transactions reached the ZiG$1.8
billion mark in December 2024, a significant increase from less than ZiG200
million in June 2024, as shown in Figure 39.

Figure 39: Interoperability Transaction Values and Volumes (Apr- Dec 2024)


Source: Reserve Bank of Zimbabwe, 2025

SWIFT ISO 20022 Migration from MT Messages
153. The Banking community continued to work towards full compliance with SWIFT
cross-border payment processes for the ISO 20022 program, after successfully
implementing incoming and outgoing cross border payments and reporting plus
(CBPR+).

Cybersecurity Management
154. To mitigate risks associated with cyber threats and technological disruptions, the
Reserve Bank is strengthening the regulatory framework governing the National
Payment Systems. Regular assessments of system resilience and the
implementation of best practices in cybersecurity will continue to be prioritized.
155. All stakeholders in the financial services sector are expected to effectively
collaborate, embrace the risk-based approach, and work towards ensuring the
success of the related cyber control measures.


30-Apr-24
31-May-24
30-Jun-24
31-Jul-24
31-Aug-24
30-Sep-24
31-Oct-24
30-Nov-24
31-Dec-24
Volumes Millions
Values Billions
Values LHS
Volumes RHS

Anti-Money Laundering and Counter-Financing of Terrorism (AML-CFT)
156. The payments sector has maintained a strong commitment to adhering to AntiMoney Laundering (AML) and Counter Financing of Terrorism (CFT)
international standards and regulatory requirements. This is reflected through the
strengthening of internal controls, compliance programs and risk management
frameworks by payment service providers (PSPs).

Regional And International Developments
157. The Bank continued to collaborate with other Central Banks and international
organizations to enhance cross-border payment systems and enforce international
best practices in the market.

158. Local banks continued to integrate with the regional payment systems which
include the Pan African Payment and Settlement System (PAPSS), COMESA’s
REPSS (Regional Payment and Settlement System) and SADC RTGS System.

SECTION SIX
MONETARY POLICY MEASURES

159. Price stability is the overriding objective of the Reserve Bank of Zimbabwe’s
Monetary policy framework. Accordingly, the policy measures implemented by
the Reserve Bank during the last quarter of 2024 have resulted in the relative
exchange rate and inflation stability in the economy. The gains made on the
exchange rate and inflation front have laid a solid foundation for continued
stability in the economy, going forward.

Monetary Policy Strategic Thrust
160. The Reserve Bank recently finalised its Strategy Plan (2025-2029), which has been
reconfigured to focus exclusively on its core mandate of maintaining price and
financial stability. This has been aligned to the “Back-to-Basics” thrust of the
Reserve Bank with a priority focus to balance “Confidence-Trust-CredibilityEfficiency-Stability-Growth” outcomes.

161. In this strategy, the Reserve Bank aims to further entrench sustained price,
currency and exchange rate stability in the economy to consolidate the gains made
on ZiG, thus far.

162. The key imperatives of the Monetary Policy Framework under the reconfigured
Reserve Bank Strategy Plan, which benefited from extensive stakeholder
consultations, include:-
i.
Optimal Money Supply Management;
ii.
Modernisation of monetary policy formulation, implementation, monitoring
and impact evaluation;
iii.
Allowing greater flexibility and deepening of the interbank foreign exchange
market;

iv.
Accumulation of adequate foreign reserves to back ZiG and boost import
cover;
v.
Effective Monetary Policy communication and stakeholder engagement;
vi.
Leveraging on fintechs, financial sector innovation and digitalisation;
vii.
Strengthening financial sector stability through effective surveillance;
viii.
Fostering sustainability in the financial sector;
ix.
Entrenching financial inclusion; and
x.
Effective coordination and congruence of monetary and fiscal policies,
including prudent liquidity management.

Monetary Policy Framework (2025)
163. The Monetary Policy Framework for 2025 will be underpinned by three strategic
pillars aligned to the RBZ Strategy Plan (2025-2029), namely:
(i)
Consolidating Price, Currency and Exchange Rate Stability;
(ii)
Enhancing Monetary Stability, Research, Policy and Data Integrity; and
(iii)
Maintaining Safety, Soundness, Resilience and Integrity of the Financial
Sector (see Figure 40).

Figure 40: Reserve Bank Monetary Policy Framework (2025)


164. The Reserve Bank will implement well sequenced monetary policy measures
guided by the foregoing strategic pillars of the monetary policy strategy. The
sequencing and timing of the monetary policies will be based on a continuous
monitoring and assessment of domestic, monetary and financial conditions, as well
as global economic conditions.

165. Consequently, the Reserve Bank will maintain a tight monetary policy stance and
make appropriate reviews, consistent with inflation and exchange rate
developments.

MONETARY POLICY MEASURES

166. In line with statutory requirements, this Monetary Policy Statement outlines policy
measures for the ensuing six months. The monetary policy stance for the first half
of 2025 will, therefore, be aimed at consolidating stability and supporting
economic growth, premised on the following policy measures and considerations:

(a)
Review of Exporters’ Foreign Currency Retention Threshold
167. In order to guarantee continued stability in the interbank foreign exchange market
through augmenting the supply of foreign currency, as well as building the critical
foreign currency reserves needed to anchor the ZiG, the foreign currency retention
level for exporters has been reduced from 75% to 70%, with immediate effect.
This implies that the effective surrender portion of export proceeds has been
increased from 25% to 30%.

168. This review is consistent with the increased use of ZiG in the economy. The
additional 5% will ensure that exporters mobilise sufficient ZiG to meet local
currency obligations and other expenses, including tax payments, going forward.

(b)
Introducing a US Dollar Denominated Deposit Facility (USDDDF)
169. In order to ensure preservation of value, exporters with no immediate use of the
ZiG equivalent of the additional 5% of the export surrender proceeds will have an
option to invest the funds in a USDDDF at the Reserve Bank which they can
withdraw in ZiG on demand, at the prevailing interbank exchange rate on the
settlement date.

(c)
Refinement of the Foreign Exchange Management System

i.
Clarification of the Interbank Foreign Exchange Trading Guidelines
170. In order to engender greater flexibility and deepen the foreign exchange market,
while enhancing its efficiency and the price discovery mechanism, the Reserve
Bank is further refining and clarifying the Interbank Foreign Exchange Trading
Guidelines to Authorised Dealers, as follows:
•
The 5% trading margin as communicated in the previous Interbank Foreign
Exchange Trading Guidelines issued at the inception of the Willing-Buyer
Willing-Seller Foreign Exchange Trading Arrangements on 3 May 2024, was
only applicable for the determination of the starting exchange rate, following
the introduction of the new currency, ZiG.
•
Accordingly, Authorised Dealers are expected to on-sell foreign exchange
purchased from willing sellers, including the Reserve Bank, at a margin
consistent with international best practices.

ii.
Removal of Limits on Foreign Exchange Trading
171. The limits on funds that can be accessed from the Foreign Exchange Interbank
Market that had been set at US$500,000 and US$100,000 for Primary and
Secondary users of foreign exchange, respectively, per week, per entity as stated
in Section 3.1 of Exchange Control Circular 4 of 2022, have been removed with
immediate effect.

172. The Reserve Bank will issue streamlined Foreign Exchange Interbank Market
Guidelines to operationalise the refinements on the exchange rate management
system and removal of foreign exchange trading limits.

iii.
Review of Prepaid International Debit and Credit Cards Limit
173. In order to promote the use of the prepaid international debit and credit cards, the
Reserve Bank has, with immediate effect, reviewed upwards the annual limit from

US$500,000 (Five hundred thousand United States Dollars) to US$1,000,000
(One million United States Dollars).

174. This review will also enhance the ease of doing business and reduce the use of
foreign currency cash for cross-border transactions.

iv.
Foreign Currency Exposure Limits
175. The single currency and the overall foreign exchange risk exposure limits are
critical risk management tools for managing foreign exchange exposures of banks.
These limits are prescribed under the Banking Regulations S. I. 205 of 2000 at
10% and 20% of net capital base, respectively.

176. However, as provided under the Banking Regulations, the Reserve Bank has been
granting temporary exemptions on a case-by-case basis given the multicurrency
framework and its impact on the banking institutions’ balance sheets.

177. In order to allow ZiG to gain prominence in the multicurrency system and align
with the prescribed foreign currency exposure limits under the Banking
Regulations, the Reserve Bank will set upper limits to facilitate winding down, by
banking institutions, that are currently over-exposed in foreign currency.

(d)
Sustainable Accumulation of Gold and Foreign Currency Reserves
178. Since the introduction of ZiG in April 2024, the Reserve Bank embarked on a
reserves accumulation strategy focused on ensuring that the ZiG component of
reserve money is fully backed, at all times. The total holdings of gold and foreign
currency reserves have increased by about 90%, from US$285 million in April
2024 to around US$550 million (ZiG14.3 billion) as at end of January 2025,
thereby providing more than 3 times cover for reserve money of ZiG3.5 billion.

179. Consistent with its monetary policy objectives of ensuring currency and exchange
rate stability, the Reserve Bank is committed to the continued accumulation of
reserves to cover ZiG reserve money in the economy. The Reserve Bank will

leverage its foreign reserves build-up strategy on the anticipated increase in gold
production (from 36 tonnes in 2024 to a projected 40 tonnes in 2025), through inkind royalties, purchase of foreign exchange export surrender proceeds and from
willing sellers of foreign exchange in the WBWS market.

180. The reserves accumulation strategy of the Reserve Bank in 2025, will therefore,
shift focus towards building-up a buffer of usable official reserves to adequately
cover ZiG and to meet regional benchmarks of months of import cover. The
foreign reserves accumulation framework will be guided by the strategic intent to
ensure an optimal and balanced portfolio mix between gold and foreign currency
cash (liquidity management) to facilitate timely interventions in the foreign
exchange market.

181. The Reserve Bank has, therefore, since May 2024 been building internal capacities
and capabilities for the implementation of a robust and prudent reserve
management strategy that will guarantee value preservation and sustainable
growth in foreign currency reserves.

(e)
Interest rates
i.
Bank Policy Rate

182. The Bank Policy rate, which is currently at 35% per annum, is assessed to be
appropriate to support the current tight monetary policy stance and the envisaged
economic growth. As such, the policy rate will be maintained at the current level
of 35% per annum and reviewed by the Monetary Policy Committee (MPC), from
time to time, based on inflation developments and other market fundamentals.

ii.
Minimum Deposit Interest Rates and Promotion of a Savings Culture
183. Considering recent stakeholder concerns and the need to reward depositors, the
minimum interest rates for savings and time deposits in both ZiG and USD have
been reviewed upwards, with immediate effect, as follows:

Currency/Term
Savings Deposit Rates
Time Deposit Rates

Old
New
Old
New
ZiG Deposits

USD Deposits


184. The Reserve Bank encourages banks to offer depositors more than the stipulated
minimum deposit rates, to promote a banking and savings culture in the economy.

185. Depositors should take advantage of these interest rates to place their savings in
these interest-bearing savings and time deposit accounts as opposed to noninterest-bearing current accounts. The Reserve Bank has engaged the Bankers
Association of Zimbabwe (BAZ) to ensure that the banking system encourages
their depositors to make use of these interest-bearing deposit accounts through
awareness campaign programmes and promotions.

(f)
Statutory Reserves
186. Statutory reserves were increased and standardised to 30% for demand deposits
and 15% for savings and fixed deposits in both local and foreign currency. This
adjustment has been key in sustaining the current tight liquidity in the economy,
which has assisted in stabilising inflation and the exchange rate. The statutory
reserve ratios, therefore, remain unchanged.

187. The Reserve Bank will review the statutory reserve requirements when
appropriate, consistent with prevailing monetary and financial conditions.

(g)
The Targeted Finance Facility (TFF) and Access to WBWS
Interbank Foreign Exchange Market
188. In January 2025, the Reserve Bank introduced the Targeted Finance Facility (TFF)
to enhance banks’ support to productive sectors. The TFF is financed from the
pool of banks’ statutory reserves held at the Reserve Bank, implying that there is
no new money created to finance it. The operational modalities of the TFF have
already been issued to banks.

189. In order to address working capital challenges recently experienced by some
wholesalers and retailers, the TFF has been extended to these critical sectors to
enable them to restock.

190. To ensure the effectiveness of the TFF facility in supporting productive sectors,
beneficiaries of the funds can access the WBWS Interbank Foreign Exchange
Market to access the requisite foreign currency, upon submitting bonafide invoices
to support their critical import requirements.

(h)
Currency Management
191. Cognisant of the need to ensure the optimal distribution of ZiG notes in the
economy, particularly for ease of access in the remote areas and to further entrench
financial inclusion, the Reserve Bank is embarking on an intensive and extensive
educational campaign programme and other initiatives, working with key
stakeholders in the communities.

192. The Reserve Bank is also working on enhancing the quality and design of ZiG
bank notes in line with international standards. The rollout of the improved high
quality ZiG notes will be communicated in due course.

(i)
Functional and Presentation Currency - Financial Reporting
193. Given the need to ensure comparability of financial statements, the Reserve Bank,
following consultations with the Public Accountants and Auditors Board (PAAB),

requires that all entities adopt a common presentation currency, ZiG, for reporting
purposes, with immediate effect, including for the 2024 audited financial
statements. This requirement is consistent with the increase in the number and
value of transactions settled in ZiG since its introduction on 5 April 2024.

194. Government and other regulatory bodies, such as the Zimbabwe Stock Exchange
(ZSE), the Securities and Exchange Commission of Zimbabwe (SECZim) and the
Insurance and Pension Commission (IPEC) will issue statements to enforce the
new reporting requirements by all entities.

(j)
Liquidity Management
195. The tight monetary policy stance of the Reserve Bank comes with inevitable
liquidity squeeze, necessary to instil market discipline and curtail disruptive
speculative behaviour in the economy. Excess liquidity in the money market
always has a damaging effect and curtails the Central Bank’s quest to maintain
price, currency and exchange rate stability.

196. In view of the above, the Reserve Bank continues to closely monitor liquidity
levels and developments, and to take necessary measures to ensure optimal
liquidity and guarantee the smooth and efficient operation of the national payments
system. The operational interventions by the Reserve Bank in the money market
will always be guided by the need to balance stability and growth.

(k)
Promoting Inter-Bank Market Trading
197. The Reserve Bank is concerned that trading on the inter-bank market has remained
low, largely due to the evident market segmentation. Lack of trading on the interbank market necessitates the Reserve Bank to accommodate individual banks in
short positions, as opposed to settling the net market position through the “Lender
of Last Resort” window.

198. In this regard, following extensive consultations with the market, the Reserve
Bank is working with the Bankers Association of Zimbabwe (BAZ) to resuscitate
a vibrant inter-bank money market to enhance the monetary policy transmission
channel in the economy. Banks are, therefore, encouraged to set counterparty
limits among themselves that promote a vibrant and efficient inter-bank money
market, which is vital for monetary policy effectiveness.

(l)
Bank and Transaction Charges
199. Domestic stakeholders consulted by the Reserve Bank bemoaned the current high
levels of bank charges obtaining in the banking sector. The Reserve Bank will
continue to ensure that banks strictly adhere to a policy compelling them to
exempt from bank charges, all accounts that maintain a balance below US$100 or
its equivalent in ZiG. In addition, Point of Sale (POS) transactions for amounts
less than US$5 or its equivalent in ZiG are also exempted from transaction
charges, for both banking institutions and Payment System Providers (PSPs).

200. The Reserve Bank is also working with BAZ and PSPs to come up with
mechanisms to minimise bank charges and encourage use of e-cash to promote
ZiG. These mechanisms will be finalised and communicated before the end of the
first half of 2025.

(m)
Promoting Digital Payments and Use of Point of Sale (POS)
Machines
201. In line with the policy stance to enhance digital transactions in the economy, Banks
and Payments System Providers (PSPs) are directed with immediate effect to
ensure that every business account (new and existing) is issued with a Point of
Sale (POS) machine or any other approved digital mechanism which can facilitate
transactions in both ZiG and USD. Any dormant POS machines or digital
transactional gadgets should be reported to the Reserve Bank Toll Free Hotline
(0800 6009).

202. To promote the use of normal banking channels on all domestic trading
transactions, the Reserve Bank further advises all Local Authorities and other
licencing entities to ensure that all applicants for trading licences (individuals or
corporates) have a bank account and a functional POS machine at the point of
licencing and/or renewal.

(n)
Discriminatory Pricing Practices in Telecommunications
203. The Reserve Bank has received complaints from stakeholders during the
consultative meetings alleging that some mobile money operators are applying
discriminatory pricing practices against ZiG in preference for USD transactions.
For instance, promotions for internet data packages are only available in US
dollars and not in ZiG.

204. The Reserve Bank has since engaged the regulatory authority, Postal and
Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), and the
Telecommunications Operators Association of Zimbabwe (TOAZ). The Reserve
Bank, through the Financial Intelligence Unit (FIU) will continue to monitor
adherence to this requirement by TOAZ members.

205. The industry players have agreed to rationalise their pricing structures. This will
allow their customers to purchase internet data packages using their currency of
choice.

(o)
Capital Flows Management – Trade and Investment Facilitation
206. The management of capital flows is considered an important part of the
macroprudential policy toolkit for developing countries, which remains
instrumental in offsetting systemic risk externalities.

207. Consistent with SADC’s capital flows management framework, currently under
implementation in the Committee of Central Bank Governors (CCBG) grouping,
a modern framework of administration of foreign currency flows has been adopted
to protect and safeguard regional economies from macro-financial instability.

208. In this regard, and in line with regional standards, the Reserve Bank, as part of its
reorientation of the strategic thrust, has, therefore, created new structures that
ensure: -
i. Macro-prudential management of cross-border capital flows that encourage
companies to grow globally from a domestic base, and facilitate trade
(exports and imports) and investment (debt and equity);
ii. Effective risk-based surveillance of cross-border capital flows;
iii. Robust cross-border reporting systems to effectively track foreign currency
flows; and
iv. Simplification of foreign exchange transactions administration for ease of
doing cross-border trading and investment.

(p)
Other Monetary Policy Support Measures

i.
Sustainable Banking Practices
209. The Reserve Bank has positively noted that banking institutions are at various
stages of integrating sustainability considerations into their overall business
strategies and Board Governance systems.

210. As a way to enhance effectiveness of the processes, all banking institutions are
required to nominate suitably qualified and/or experienced Board Sustainability
Champions and advise the Reserve Bank by 31 March 2025.

ii.
Climate Risk Management
211. The Reserve Bank continues to focus on potential risks to financial stability from
climate change. In this regard, and in line with requirements stipulated in the
Climate Risk Management Guideline 01-2023/BSD, banking institutions are
required to submit to the Reserve Bank their institutional climate risk profiles as
at 31 December 2024, by 31 March 2025. The risk profiles should clearly indicate
sectoral and portfolio exposures to climate risks.

iii.
Cyber Resilience in the Banking and Microfinance Sectors
212. The increasing sophistication of cyber threats poses significant risks to the
financial sector, making cyber resilience critical for maintaining public trust,
protecting sensitive data, and ensuring uninterrupted financial services.
Accordingly, the Reserve Bank places greater emphasis on strengthening sectorwide frameworks to address these risks and ensure financial system stability.

213. In order to enhance cybersecurity, all banking and deposit-taking microfinance
institutions are required to conduct annual cybersecurity audits. The audit reports
must be shared with the Reserve Bank at the same time they are submitted to the
Board’s Audit Committee.

iv.
Risk Management Framework for Artificial Intelligence
214. The Reserve Bank acknowledges the transformative potential of Artificial
Intelligence (AI) in enhancing efficiency, decision-making, and customer service
in the financial sector. However, the Reserve Bank also recognizes various risks
associated with the use of AI.

215. In this regard, financial institutions are required to put in place robust risk
management systems, taking into account issues of data security, ethical concerns
and operational vulnerabilities.

216. Similarly, the Reserve Bank has embarked on a financial innovation, fintechs and
digitalisation strategy, to enhance operational efficiency, robust risk management
and keep abreast with global technological developments.

v.
Lending Practices of Microfinance Institutions
217. Following extensive stakeholder consultations, the Reserve Bank has received
complaints on predatory lending practices by some microfinance institutions, in
violation of the Microfinance Act [Chapter 24:30] and Consumer Protection
Framework No. 1-2017/BSD. The complaints include unethical and

unprofessional loan collection methodologies, over-deductions on customers’
salaries and illegal disposal of collateral.

218. Against this background, the Reserve Bank is intensifying its surveillance of
microfinance institutions to ensure compliance with the Microfinance Act and
Consumer Protection Framework. Appropriate supervisory actions will be
instituted against non-compliant institutions. The Reserve Bank will provide a
report back to stakeholders in the Mid-term Monetary Policy Statement in August
2025.

vi.
Promoting Financial Inclusion in Remote and Under-served
Communities
219. The Reserve Bank remains committed to the fostering of financial inclusion and
allowing wider access to financial services, including ZiG to remote and underserved communities, including designated growth points.

220. To promote widespread establishment of bureaux de change operators in remote
and under-served communities, the Reserve Bank has, with immediate effect,
exempted licencing fees for opening of branches in these areas.

vii.
Taking of Deposits by Unlicensed Entities
221. The Reserve Bank has noted with concern that some members of the public
continue to place deposits with institutions and individuals that are not authorised
to take deposits, including credit-only microfinance institutions, under the guise
of “high returns on investments”.

222. Members of the public are advised that only registered banking and deposit-taking
microfinance institutions (microfinance banks) are authorised to mobilise deposits
from the public. For the avoidance of doubt, credit-only microfinance institutions
are not authorised to take deposits. A list of registered deposit-taking microfinance
institutions is available on the Reserve Bank website (www.rbz.co.zw).

223. The Reserve Bank will take appropriate supervisory action, including cancellation
of the registration certificate, in terms of the Microfinance Act, against noncompliant credit-only microfinance institutions that take deposits.

224. Members of the public are, therefore, warned against facilitating illegal deposittaking by entities that are not authorised to take deposits as they risk losing their
funds with no recourse to the Reserve Bank.

viii.
Abuse of safe deposit boxes to by-pass formal banking channels
225. The Reserve Bank has noted with concern the increasing abuse of safe deposit
boxes and the proliferation of “shadow banks”. It has been observed that some
businesses are not banking all or most of their cash receipts and are, instead,
keeping such cash in safe deposit boxes held with financial institutions and
security companies.

226. This trend is not only a violation of the Bank Use Promotion and Suppression of
Money Laundering Act [Chapter 24:24] which requires businesses to bank all their
cash receipts, but it also promotes tax evasion and money laundering.

227. The Reserve Bank is working with the Financial Intelligence Unit and other Law
Enforcement Agencies to curtail such practices and encourage the use of normal
banking channels, in line with the Bank Use Promotion and Suppression of Money
Laundering Act [Chapter 24:24].

(q)
Fiscal and Monetary Policy Complementarity

228. It is essential that there is complementarity and cohesion between fiscal and
monetary policies. This Monetary Policy Statement is, accordingly, aligned with
the following key imperatives highlighted in the 2025 National Budget and
anticipated to be critical anchors to the National Development Strategy 2 (NDS2),
and Vision 2030:

a.
Price Stability: The Reserve Bank will use available monetary policy
tools as enunciated in this Monetary Policy Statement to anchor price
stability.
b.
Exchange Rate Stability: This Monetary Policy Statement has
amplified measures to enhance the efficiency of the willing-buyer
willing-seller foreign exchange rate system, in order to promote price
discovery.
c.
Maintenance of tight monetary policy: The Reserve Bank is
committed to a tight monetary policy stance.
d.
Bank charges: In collaboration with banks, the Reserve Bank will
continue to explore ways to reduce transaction costs in the banking sector
to address public concerns on high bank charges.
e.
Financial Inclusion: The Reserve Bank is working with banks and nonbanking institutions to facilitate the continued development of tailormade products and services for the unbanked segment of the population.
f.
Economic Growth: The measures contained in this Monetary Policy
Statement are aligned to the achievement of the envisaged 6% economic
growth for 2025.

SECTION SEVEN
ECONOMIC OUTLOOK
229. The monetary policy measures outlined above are expected to anchor inflation and
exchange rate expectations and support the envisaged growth of 6% in 2025. The
implementation of these measures will be sustained to create a track record of
sound monetary policy performance, critical for fostering Central Bank policy
credibility. At the same time, the favourable economic growth for 2025 will
benefit from the anticipated recovery in agriculture and the power sector.
Inflation Outlook
230. The commitment by the Reserve Bank to pursue optimal monetary policies
through prudent reserve money targeting and strategic interventions in the foreign
exchange market will stabilise the exchange rate, which is a key driver of price
dynamics in a multi-currency environment. As such, the inflation trajectory is
expected to continue on a downward trend, with month-on-month inflation
projected to average below 3% in 2025, consistent with exchange rate stability.
231. Given the base effects caused by the spike in monthly inflation in October 2024,
annual inflation is expected to be elevated from April 2025 to September 2025
before significantly moderating to end the year between 20-30%.
Balance of Payments Outlook
232. The country’s current account balance is expected to further improve from a
surplus of US$501.2 million in 2024 to a surplus of US$611.6 million in 2025
reflecting anticipated stronger export performance and continued robust personal
transfers inflows (remittances).

SECTION EIGHT
CONCLUSION
233. The Reserve Bank remains firmly committed to maintaining price stability
experienced since April 2024, through prudent monetary policy actions. The
measures announced in this Monetary Policy Statement will consolidate these
gains and address emerging risks to the outlook. Going forward, the overriding
objective of the monetary policy is to continue engendering confidence in the local
currency, through policy consistency, to foster sustainable macroeconomic
stability.
234. The Reserve Bank will also continue to strike a delicate balance between its
inflation reduction objective and supporting robust economic growth, in view of
the trade-off between the two objectives. In this regard, the Reserve Bank will
prudently calibrate the liquidity conditions in the market to curb speculative
activities.

KEY MESSAGE

The Reserve Bank will continue walking the talk in implementing policies that
promote price, currency and exchange rate stability; and will maintain the tight
monetary policy stance with the overarching objective to foster Central Bank
policy consistency and credibility.

• The measures announced in this Monetary Policy consolidate the gains of ZiG
to date and address potential risks over the outlook period.

• The Reserve Bank will, thus continue to maintain a delicate balance between
its inflation reduction objective and supporting robust economic growth.

• The Monetary Authorities will carefully manage liquidity conditions in the
market to curb speculative activities while ensuring that the economy
continues to grow at the envisaged 6% for 2025.


I Thank You


Dr. J. Mushayavanhu
GOVERNOR