THE Reserve Bank of Zimbabwe (RBZ) has abandoned the 2030 mono-currency deadline in a historic climb-down likely to restore sanity across the markets.
Previously, the central bank had set 2030 as the deadline for all transactions to be undertaken in the local ZWG currency. However, the indications had triggered panic in the markets with lending institutions shortening loans repayment periods to less than one year for fear of losing value.
Other sections of industry had also pleaded with the government to consider the continuation of the multi-currency basket system beyond 2030 arguing it was the only solution to leave the economy undisturbed.
Presenting the 2026 Monetary Policy Statement (MPS) Friday RBZ Governor, John Mushayavanhu, said 2030 will no longer be the deadline for the currency shift.
“The transition to the exclusive use of ZWG for settling all domestic transactions will be a gradual process anchored on macro-economic stability as enunciated in NDS 2. As such, the transition is not date based but is dependent on the achievements of the conditions precedent,” he said.
The central bank exchequer said conditions precedent will include durable macro-economic stability characterised by low and stable inflation at single digit levels, adequate foreign currency reserves of at least 3-6 months of imports cover in the medium to long term.
Some of the conditions include an efficient foreign exchange management system that eliminates foreign exchange market segmentation and promotes ease of access to foreign currency by importers and for other bonafide requirements.
Stable exchange rate dynamics, with minimum cover over or undervaluation of the ZWG, increased demand for ZWG through recalibration of the percentage of Government taxes broadening payment of public sector goods and services in local currency forms some of the conditions that have to be met.
Mushayavanhu also set financial sector stability, efficient and secure National Payments System, to promote ease of payment locally in ZWG. Fiscal and monetary policy cohesion, with low and sustainable National Budget deficits as preconditions.
“Under mono-currency, domestic products and services will be exclusively paid for and settled in local currency, while foreign currency will be reserved for external payments. The RBZ assures the public that financial assets and contracts denominated in foreign currency will be safeguarded and preserved.
“Accordingly, the adoption of mono-currency will not eliminate foreign currency accounts, foreign currency denominated pension fund holdings, or US dollar-based equities, including those on the Victoria Falls Stock Exchange (VFEX) and Treasury Bills,” he said.
The RBZ governor stressed that foreign currency loans, US$ denominated contracts and advances made to domestic individuals and non-exporting corporates shall remain denominated in foreign currency.
This should be simple enough, if you borrow USD pay back USD!