Zimbabwe’s monetary authorities maintained relative exchange rate stability in the first quarter of 2026, supported by controlled money supply growth and rising foreign currency inflows, according to the latest quarterly update from the Zimbabwe National Chamber of Commerce.

The Reserve Bank of Zimbabwe indicated that “the Interbank market as indicated by the Willing Seller Willing Buyer market continued being stable with the rate range bound within the 25–26 levels against the US dollar,” reflecting a period of reduced volatility in the formal foreign exchange market. This stability was reinforced by a parallel market premium that “remained under 20% for the quarter under review,” suggesting improved alignment between official and informal exchange rates.

Foreign currency inflows strengthened the external position, with receipts rising to US$4.97 billion during the period under review, up from US$3.22 billion in the same period in 2025. This surge supported trade performance, resulting in surpluses of US$1,009.9 million in January and US$46.4 million in February 2026, underscoring improved export earnings and foreign currency liquidity.

Reserve accumulation also improved, with foreign currency reserves reaching US$1.4 billion, equivalent to about 1.5 months of import cover by the end of the first quarter. While this marks progress, it remains below the medium-term benchmark outlined by the central bank, which states the need for “adequate foreign currency reserves of at least 3–6 months of import cover in the medium to long term.”

Monetary policy remained anchored on reserve money targeting. Total local currency reserve money rose to ZiG8.4 billion at end-March 2026, up from ZiG5.3 billion in December 2025, reflecting moderate expansion. Authorities emphasized that “the Central Bank's inflation control strategy is based on reserve money growth targeting,” while maintaining a strict policy of “non-financing of Government expenditure” with “the government overdraft at zero,” signaling continued fiscal discipline.

The central bank also moved to deepen the use of the domestic currency through the rollout of new banknotes. The “new enhanced local currency bank note series” was launched on 27 February 2026, with circulation beginning on 7 April 2026, supported by a nationwide awareness campaign aimed at boosting confidence in the ZiG.

On the fiscal side, the introduction of a National Standard Price List is intended to “guarantee value for money in public spending,” “address price inconsistencies across MDAs,” and “enhance control over public expenditures.”

However, business groups warn of potential distortions, including the risk that “the standard price list might have some items priced below market and hence requiring periodic reviews.”

Concerns have also been raised about unintended market pressures. The report notes “a potential spike in the parallel exchange rate as dollar demand for non-import purposes such as wages and fuel may push demand on the parallel rate to increase,” highlighting structural imbalances between formal and informal currency demand.

To address these risks, business stakeholders have proposed policy adjustments through social dialogue, including adopting payment structures aligned with market realities.

Recommendations include “the adoption of payments in proportions that reflect the current market realities,” with consideration for a shift toward a 40%/60% ZiG to USD mix, compared to the current 30%/70% transaction structure.

The extension of the company re-registration deadline to 20 April 2028 under SI 76 provides relief to firms facing compliance challenges, particularly those struggling with the online registration platform.

At the same time, ongoing ease-of-doing-business reforms signal continued engagement between government and the private sector.