Africa-Press – Zimbabwe. FBC Holdings Limited has urged the Reserve Bank of Zimbabwe (RBZ) to come up with a clear framework on de-dollarisation to reduce pressure on foreign currency reserves.
This call comes amid plans by the government to dump the multi-currency regime in favour of the Zimbabwe Gold (ZiG) currency as the sole legal tender.
However, economic stakeholders warn that without adequate foreign currency to support trade and a credible plan to build trust in the local unit, the country risks a recession similar to the economic downturns seen in past abrupt currency shifts.
“The de-dollarisation road map should be supported by a robust import substitution framework to reduce pressure on foreign currency reserves,” FBC said in its review of the 2025 Mid-Term Monetary Policy Statement.
“For economic sustainability, external inflows must be channelled into strengthening domestic currency use, enhancing export competitiveness in non-traditional sectors and establishing credible local currency pricing mechanisms across public and private sectors.”
FBC said further structural reforms and diversification were essential to reduce US dollar dependency by the target de-dollarisation date, although the current performance provided a supportive platform.
“The increased use of ZiG in both digital and cash transactions, rising from 26% in April 2024 to over 40% in June 2025, is a positive development,” FBC said.
“This trend should be reinforced by broader complementary confidence-building reforms, macroeconomic stability and policy consistency, all of which will be critical in shifting both business and consumer preferences towards the domestic currency over the medium to long term.”
Foreign currency inflows between January and June rose by 23,1% to US$7,3 billion, supporting a relatively stable ZiG/US dollar exchange rate and enabling the accumulation of foreign reserves to over US$730 million — up from US$285 million in April 2024.
“A dominant policy in the Reserve Bank governor John Mushayavanhu’s tenure has been tight monetary policy, a measure which, for all intents and purposes, has been consistent as money supply growth has not been elevated in comparison to history and any growth is culled by various liquidity management measures,” financial services firm IH Securities said.
“His reference to Milton Friedman’s quote on inflation being a monetary phenomenon indicates that there’s a commitment to maintaining inflation at relatively low levels and that the committee [monetary policy] will review the policy rate in line with inflation and economic growth.”
IH Securities said the consultation of various industry bodies was also welcome, as it would likely allow the RBZ to receive market feedback and adjust where necessary.
IH Securities noted the challenge of de-dollarisation with weak forex reserves.
“A cloud still hangs over the efficacy of the export retention policy as various exporters claim to have not received the local currency portion of their earnings, and this, or any adjustments hitherto, has yet to be made,” IH Securities said.
“We believe that addressing these serious matters would significantly improve trust, particularly as the road map to de-dollarisation has been espoused.”
The tight monetary policy and high interest rates used to defend the ZiG have severely restricted liquidity, making it harder for businesses and consumers to access affordable credit.
This has resulted in investment being choked, production slowing, and demand becoming more depressed despite the economy relying heavily on foreign currency for trade and imports.
Without a trusted, stable local currency with true price discovery on the exchange rate and adequate forex buffers, forcing a rapid shift away from the US dollar risks triggering inflation, supply shortages and recession, according to experts.
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