RBZ CLAIMS STABILITY, BUT WILL ZIMBABWE’S ECONOMY REALLY HOLD?

The Reserve Bank of Zimbabwe (RBZ) is celebrating what it says is progress in stabilizing the economy. In a recent statement, the RBZ claimed that its policies have helped to calm the exchange rate and bring down inflation. While the central bank sounds confident, many Zimbabweans are wondering — is this real stability or just another short-term fix?

The bank’s Monetary Policy Committee (MPC) held a meeting on December 3, 2024, to assess the impact of policies introduced in September. One of the biggest moves was injecting US$150 million into the foreign exchange market. According to the MPC, this move, along with other steps, helped tighten money supply and reduce speculation in the forex market.

As a result, the RBZ says inflation and exchange rate volatility have dropped. Official figures show month-on-month inflation fell from a shocking 37.2% in October 2024 to 11.7% in November. The October spike was caused by a sudden collapse of the Zimbabwean dollar (ZiG) in September. The central bank believes inflation will continue to fall back to levels seen before the October crisis.

On foreign currency inflows, the bank shared some encouraging numbers. Between January and October 2024, Zimbabwe received US$11.05 billion — a 19.1% increase from the same period in 2023. The RBZ hopes this inflow will help keep the local currency stable.

To maintain this so-called stability, the MPC has decided to keep key policies unchanged:

• The policy interest rate remains at 35%.
• Statutory reserve requirements are fixed at 15% for savings and time deposits, and 30% for demand and call deposits.
• The interbank foreign exchange market will continue to be improved.

There’s also a new rule on corporate tax: companies must now pay 50% of their taxes in US dollars and 50% in ZiG. The RBZ hopes this will push more foreign currency into the interbank market and reduce pressure on the black market.

Another new policy is the Targeted Finance Facility (TFF), meant to help businesses access money while keeping the overall money supply tight. The TFF will be handled by banks, and the RBZ plans to release more information about it soon.

While the RBZ is optimistic, many people remain skeptical. Zimbabweans have seen too many promises that were never kept. Every few months, the government or RBZ claims inflation is under control — only for prices to skyrocket again weeks later.

The 2024 inflation shock reminded everyone how fragile the economy really is. In September, the ZiG dropped in value, and in October, inflation soared. Now, with the numbers looking better again, the RBZ wants people to believe things are back on track. But ordinary citizens are asking the right questions: how long will this last? Will inflation rise again next month? Can the ZiG really survive in the long run?

The truth is that Zimbabwe’s economy is still at risk. While foreign currency inflows are up, the country continues to rely on exports of raw materials and remittances. The RBZ may claim progress, but unless long-term reforms are made — including stronger institutions, better governance, and real investment in production — these wins could fade quickly.

RBZ’s success will depend on how long they can hold the line on inflation and exchange rates. Businesses and consumers are watching closely. For now, there is a sense of cautious hope. But it remains to be seen whether this is real recovery or just another pause before the next crisis.