Government will this week give an update on an International Monetary Fund’s (IMF) supervised economic reform programme amid a worsening economic environment.Treasury last year said it would request a Staff Monitored Programme (SMP) from the IMF to help repair the battered economy, weighed down by growing exchange rate volatility, rising debt, power cuts, unemployment, dilapidated infrastructure, growing informalisation and corruption, among other risks.
Government will on Wednesday give an update on progress in the IMF’s Staff Monitored Programme and the structured dialogue platform for debt management during a question and answer session in Parliament.
During a recent Press briefing in Washington, US, IMF spokesperson Julie Kozack said: “I do not have an update for you today on Zimbabwe, but we will come back to you bilaterally.”
She had been asked to give an update on the SMP.
RBZ last week revealed that an increasing number of depositors were fleeing the banking sector amid a liquidity squeeze and declining foreign currency shortages.
The liquidity squeeze is attributed to a tight fiscal and monetary policies thrust aimed at limiting money supply growth thereby bolstering the local Zimbabwe Gold currency.
However, the current levels of the money supply are significantly lower than what the market requires amid fears this could lead to deflation.
Depositors are opting to have more control over their money by taking it out of banks.
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Both the IMF and actuarial scientists have previously questioned the health of banks.
“The Reserve Bank has noted with concern the increasing abuse of safe deposit boxes and the proliferation of ‘shadow banks’,” RBZ governor John Mushayavanhu said in his 2025 Monetary Policy Statement released last week.
“It has been observed that some businesses are not banking all or most of their cash receipts and are, instead, keeping such cash in safe deposit boxes held with financial institutions and security companies.”
He said the trend was not only a violation of the Bank Use Promotion and Suppression of Money Laundering Act [Chapter 24:24] which requires businesses to bank all their cash receipts, but it also promoted tax evasion and money laundering.
“The Reserve Bank is working with the Financial Intelligence Unit and other law enforcement agencies to curtail such practices and encourage the use of normal banking channels, in line with the Bank Use Promotion and Suppression of Money Laundering Act [Chapter 24:24],” Mushayavanhu added.
Experts say depositors no longer trust banks to keep their money as policies make it hard for people and businesses to readily have access to their foreign currency.
This action also threatens Zimbabwe’s foreign currency receipts, which last year totalled US$13,31 billion, representing a 21% increase from about US$11 billion received in 2023.
“The Reserve Bank has noted with concern that some members of the public continue to place deposits with institutions and individuals that are not authorised to take deposits, including credit-only microfinance institutions, under the guise of ‘high returns on investments’,” Mushayavanhu said.
“Members of the public are advised that only registered banking and deposit-taking microfinance institutions (microfinance banks) are authorised to mobilise deposits from the public. For the avoidance of doubt, credit-only microfinance institutions are not authorised to take deposits.”
He said the RBZ would take appropriate supervisory action, including the cancellation of the registration certificate, in terms of the Microfinance Act, against non-compliant credit-only microfinance institutions that take deposits.
“Members of the public are, therefore, warned against facilitating illegal deposit taking by entities that are not authorised to take deposits as they risk losing their funds with no recourse to the Reserve Bank,” Mushayavanhu said.
