“Following the overnight drop in the value of the ZiG, inflation spiked in October 2024 then declined significantly as both the willing-buyer willing-seller (WBWS) and parallel market rates have since stabilized, helping to bring month-on-month inflation down to an average of 0.5 percent over the period February to May 2025. At the same time, the gap between the WBWS and parallel market rates has narrowed significantly, but remains at around 20 percent. In this context, the mission welcomed the repeal of Statutory Instrument 81A of 2024—which had mandated the formal sector to use the WBWS rate in the pricing of goods and services, contributing to an increase in dollarization and informality.
“To support the authorities’ stabilization efforts, key Article IV recommendations include: in the near term, fiscal policy actions to center on closing the financing gap without recourse to monetary financing and further domestic arrears buildup, while safeguarding social spending, and delivering a durable fiscal adjustment in the longer term; monetary and FX policy to focus on supporting a transition to stable national currency, with an effective monetary policy framework and market-determined exchange rate policy; and, to boost growth, structural and economic governance reforms. In this context, policy priorities include:
Fiscal. Closing a substantial fiscal financing gap for 2025 in a way consistent with available sustainable and non-inflationary financing. This would require rationalizing spending and increasing the effectiveness of the authorities’ strategy to run a cash budget through better planning and stronger political commitment to control spending. This would also require strengthening the public spending commitment control system to avoid further arrears accumulation; and a close monitoring of domestic arrears (including through an audit of remaining arrears). The 2026 Budget will be critical to establish a policy track record, and measures will be needed to close the fiscal gap in 2026. Over the medium term, fiscal adjustment should be accompanied by fiscal-structural policies to strengthen public financial management (PFM), expenditure controls, and budget credibility.
Monetary and FX. The mission recommends improving the functioning of the WBWS market through a more transparent price-setting mechanism and by gradually replacing surrender requirements with a requirement to convert export proceeds directly into the market through Authorized Dealers, while focusing the RBZ’s FX interventions to managing excessive volatility in the exchange rate. Monetary policy can be enhanced by the introduction of an effective deposit facility at the RBZ, followed by fully introducing indirect market instruments and phasing out direct instruments. In the longer-term, a comprehensive package of macroeconomic, financial, and structural policies should be pursued to allow for a gradual relaxation of other Capital Flow Management Measures (CFMs) and elimination of undesirable exchange restrictions noted by the Article VIII mission.
Mutapa Investment Fund and State-owned enterprises (SOEs). To mitigate fiscal risks, the mission recommends strengthening the governance framework for the Mutapa Investment Fund—including strengthening its reporting, audit, disclosure, and oversight requirements in line with international best practices—and the overall public sector transparency and reporting.
“The authorities have also announced their plan to transition to a mono-currency system by 2030. The mission emphasized the need to continue strengthening the monetary and FX market framework in line with IMF staff recommendations. This should be complemented by measures to enhance the demand for ZiG in the domestic economy—most notably, increasing the share of Treasury’s operations (revenues and expenditures) in ZiG. To reduce any uncertainty weighing on financial intermediation, the authorities should provide more clarity on the operational implications of the transition plan, including clarifying that the use of a mono-currency will be limited to domestic transactions, allowing for bank deposits to remain denominated in both currencies.
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To Zimbabwe Central Bank a great strategy to get the international community and your locals to believe in the Zim Currency completely is to accept ALL forms of your currency again for a specific period of time such as the Zim Dollar, RTGS and the Zig which will show everyone that you’re willing to honor what was before before moving forward to one sole currency. Your country has all the resources needed to be successful and I believe you can and will be. Please consider recollecting all the notes for Zimbabwe and see what success that brings!