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The Reserve Bank of Zimbabwe (RBZ) has collected US$402 million from exporters between January and May 2025 through the compulsory foreign currency surrender mechanism.
By Ryan Chigoche
This inflow, largely driven by the mining sector, is part of the central bank’s broader strategy to stabilise the local economy and strengthen the ZiG, Zimbabwe’s gold-backed currency.
Under the current policy framework, exporters are required to surrender 30% of their foreign currency earnings to the RBZ in exchange for the ZiG.
This initiative is aimed at enhancing liquidity within the interbank foreign exchange market and ensuring that the central bank retains greater control over the management and distribution of hard currency.
In February, the RBZ implemented a key policy change by reducing the foreign currency retention threshold from 75% to 70%.
This move formed part of a broader package of monetary reforms introduced to consolidate the strength of the ZiG and bring more foreign currency under the central bank’s direct supervision.
By increasing the surrender portion, the RBZ aims to better manage currency flows, support the official forex market, and maintain exchange rate stability.
The mining sector plays a pivotal role in this process. As the country’s leading source of foreign currency, mining contributes about 70% of Zimbabwe’s total export earnings.
With mineral exports exceeding US$5 billion annually, the 30% surrender requirement means that miners alone are expected to contribute over US$1.5 billion in forex inflows to the central bank each year.
This makes the sector indispensable to the RBZ’s strategy of reserve accumulation and currency stabilisation.
Governor John Mushayavanhu has emphasised that the surrendered funds are being strategically allocated to meet pressing national needs.
A substantial portion is being used to fulfil government obligations that require foreign payments.
Another significant share is being channelled into the interbank market to satisfy demand from companies and individuals who require forex for imports and other international transactions. A smaller, yet vital, portion is being directed toward building up the nation’s foreign currency reserves.
As of May 2025, Zimbabwe’s total reserve holdings had risen to nearly US$700 million, a level that marks a significant improvement in the country’s financial buffers.
Of this, US$352 million is held in gold, providing a tangible and widely accepted store of value. An additional US$258 million is held in cash and nostro balances—foreign currency accounts maintained by the RBZ in overseas financial institutions.
The remaining reserves are composed of other diverse assets. This reserve composition is critical in underpinning the credibility of the ZiG and boosting investor and public confidence in the currency’s long-term viability.
At the Chamber of Mines conference earlier this year, Governor John Mushayavanhu underscored the importance of compliance within the mining sector, stating:
“Since miners are the major contributors to foreign exchange in this country, they should comply… where is this country going to get forex?”
His remarks reflect the RBZ’s reliance on mining as the foundation of Zimbabwe’s forex ecosystem and its efforts to anchor monetary policy on solid export fundamentals.
Through a combination of policy tightening, increased centralisation of forex inflows, and strategic reserve management, the RBZ is working to entrench the stability of the ZiG and create a more predictable and sustainable economic environment—with the mining sector at the heart of this transformation.
