Zimbabwe Central Bank Defends Monetary Policy Amid IMF Calls for Dollar Exit Clarity

The International Monetary Fund (IMF) has urged Zimbabwe to provide greater clarity on its plan to phase out the use of the US dollar by 2030 and fully adopt the Zimbabwe Gold (ZiG) currency, which has yet to gain wide acceptance. The IMF highlighted concerns about the unclear role of the ZiG, fiscal pressures from a $21 billion debt burden, and the fragile credibility of monetary policy amid ongoing high dollarisation. Zimbabwe's Reserve Bank defended its tight monetary policy and the current foreign exchange framework, emphasizing progress in stabilizing the ZiG and controlling inflation. However, the IMF criticized the hybrid currency anchor system and the limited flexibility of the willing-buyer willing-seller foreign exchange mechanism, recommending reforms for a more transparent, market-based system. The IMF also noted that banks have begun restricting dollar lending in anticipation of the mono-currency switch, underscoring the need for clear communication and policy credibility to build public trust. Overall, Zimbabwe faces a complex challenge in reclaiming monetary sovereignty and achieving sustainable development beyond the constraints imposed by dollarisation.