*RBZ MPC signals stronger foreign currency position as import cover improves*
Zimbabwe’s foreign currency earnings continue to strengthen, with the latest Monetary Policy Committee (MPC) statement revealing a significant rise in inflows and an improvement in the country’s import cover, developments that point to growing macroeconomic stability and enhanced confidence in the economy.
According to resolutions from the Reserve Bank of Zimbabwe (RBZ) Monetary Policy Committee meeting held on June 15, 2026, foreign currency inflows surged to US$8.3 billion as at May 31, 2026, up from US$6 billion during the same period in 2025, representing a robust 39.1 percent increase. The rise in foreign currency earnings has been attributed to resilient economic activity, export performance and stronger inflows into the banking system despite global geopolitical and supply chain disruptions.
The MPC said these elevated inflows have played a crucial role in supporting domestic transactions and maintaining exchange rate stability. Foreign currency payments during the same period stood at US$5.9 billion, resulting in a net surplus that boosted deposits in the banking sector and strengthened liquidity in foreign exchange markets.
Foreign reserves and import cover strengthen: One of the strongest indicators emerging from the MPC statement is the growth in Zimbabwe’s foreign currency reserves. The RBZ reported that reserves backing the ZiG reached the equivalent of US$1.5 billion by May 2026, providing approximately 1.5 months of import cover. Import cover is widely used as a measure of a country’s ability to finance imports using its reserves, and the latest figures suggest an improving external sector position. Stronger reserves also enabled the Central Bank to strategically intervene in the foreign exchange market to ensure legitimate foreign currency requirements were met while maintaining currency stability. The MPC noted that the ZiG exchange rate remained largely stable between ZiG25 and ZiG27 per US dollar, supported by subdued parallel market activity and growing foreign currency availability in formal channels.
Inflation remains under control: The Committee also highlighted continued progress in inflation management. Monthly inflation temporarily rose to 1.1 percent in April 2026, largely due to the global oil price shock and fuel price adjustments, before easing back to 0.5 percent in May, returning to pre-shock levels. Annual inflation remained below 5 percent, standing at 4.8 percent in April and 4.4 percent in May 2026, reinforcing confidence in the RBZ’s tight monetary policy stance. The MPC credited Government measures such as fuel tax reductions, cost rationalisation by businesses and alternative energy adoption for cushioning consumers against inflationary pressures. Importantly, the Committee said inflation expectations have become more stable after Zimbabwe moved from the 95.8 percent inflation peak recorded in July 2025 to consistent single-digit levels since January 2026.
Economy projected to grow by 5 percent: Despite global supply chain disruptions linked to tensions in the Middle East, the MPC maintained an optimistic outlook for the economy, projecting 5 percent economic growth in 2026, upholding expectations of continued resilience. The Central Bank said improved foreign currency inflows, stronger reserves and exchange rate stability are creating conditions for sustainable growth while enhancing investor confidence.
Savings culture and monetary reforms: The MPC also welcomed the operationalisation of the ZiG Denominated Term Deposit Facility (ZiGDTDF), which is expected to support positive real interest rates, encourage savings and deepen domestic investment culture. The facility recorded early uptake, with ZiG367.2 million subscribed under the 90-day instrument and ZiG110 million under the 30-day instrument, signalling increasing confidence in local currency-denominated savings instruments.