Source: New measures to enhance competitiveness, support businesses: Central bank | The Sunday News
Dr John Mushayavanhu Rutendo Nyeve, Sunday News Reporter
THE Reserve Bank of Zimbabwe (RBZ) has expressed confidence in the country’s economic and financial prospects, after unveiling key monetary policy measures aimed at promoting stability, growth, and competitiveness.
In a speech delivered on his behalf by RBZ Chief Economist Mr Tongai Tarubona during the National Competitiveness Commission (NCC) Inaugural Summit in Bulawayo, the central bank’s governor, Dr John Mushayavanhu, outlined a series of interventions designed to support businesses, financial institutions, and the broader economy.
Dr Mushayavanhu said the monetary policy for the first-half of 2025 will focus on consolidating the gains achieved in 2024, particularly in stabilising inflation and the exchange rate.
He projected that the economy would grow by six percent in 2025, driven by a rebound in key sectors and continued macroeconomic stability.
“The measures we have implemented since late 2024, including adjustments to the policy rate and statutory reserve requirements, have brought about relative stability in prices and the exchange rate,” said Dr Mushayavanhu.
He also said the RBZ would continue to balance the delicate trade-off between inflation reduction and economic growth, ensuring that the economy remains on a sustainable path.
Reserve bank of Zimbabwe
To support businesses and enhance competitiveness, the RBZ has introduced several measures, including the review of exporters’ foreign currency retention threshold.
The retention threshold for exporters has been adjusted from 75 to 70 percent, with the additional five percent surrender requirement now offering exporters the option to invest in a US Dollar Denominated Deposit Facility (USDDDF).
This measure is expected to provide exporters with more flexibility in managing their foreign currency earnings.
Dr Mushayavanhu said the RBZ has clarified interbank foreign exchange trading guidelines to enhance market efficiency and price discovery with the Willing-Buyer Willing-Seller (WBWS) system set to be deepened to ensure a smooth flow of foreign exchange to the market.
The Governor also highlighted the resilience of the banking sector, noting that banks remain well-capitalised, with non-performing loans (NPLs) at a low of 3,67 percent as of December 2024, well below the benchmark of five percent. He expressed confidence that the banking sector would remain safe, sound, and profitable, enabling it to extend credit to productive sectors and underwrite the country’s growth prospects.
“The national payment system is secure, safe, and efficient, with steady transaction growth indicating a healthy financial environment,” said Dr Mushayavanhu.
He added that the RBZ would continue to maintain three times cover for total ZiG reserve money, backed by foreign assets, to ensure stability in prices and the exchange rate.
Zimbabwe’s external sector performance remains strong, with the country recording a current account surplus of US$501,2 million in 2024, projected to rise to US$611,6 million in 2025.
Firming gold prices, increased foreign currency receipts, and strong diaspora remittances are expected to support this surplus, ensuring sufficient foreign currency resources to meet the country’s needs.
“The sustained inflow of foreign currency will enable the RBZ to continue liquefying the interbank market for foreign exchange, supporting critical imports and maintaining exchange rate stability,” said Dr Mangudya.
The Governor further called for a collaborative effort between the public and private sectors to drive Zimbabwe’s economic competitiveness.
He urged businesses to adapt to the “new normal” of tighter profit margins and innovate to thrive in a stable economic environment.
“The path to a competitive Zimbabwe is a shared journey. The RBZ is committed to driving policies that uplift our economy, but we need the private sector to innovate and adapt. Together, we can create a thriving environment where businesses flourish and our nation prospers,” said Dr Mangudya.
With these measures in place, Zimbabwe’s economic outlook for 2025 appears promising, with the RBZ playing a pivotal role in ensuring stability, growth, and competitiveness. As the country moves forward, the focus will be on maintaining this momentum and building a brighter future for all Zimbabweans.
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