Mushayavanhu puts reserve accumulation at the centre of the next monetary test after foreign-currency receipts reached US$10.72 billion in six months

· Foreign reserves reached US$1.7 billion by end-July, covering 1.7 months of imports.
· First-half foreign-currency receipts increased 47.8% to US$10.72 billion.
· Two months of cover remains below the RBZ’s three-to-six-month medium-term benchmark.

HARARE – Zimbabwe is targeting foreign-currency reserves equivalent to two months of imports by the end of 2026, extending a reserve build that had lifted the country’s buffer to US$1.7 billion by July as the Reserve Bank seeks to place firmer balance-sheet support behind ZiG.

Reserve Bank of Zimbabwe Governor John Mushayavanhu announced the year-end target on Monday during the official opening of Ecobank Zimbabwe’s new headquarters in Harare. He said the banking sector remained resilient, monetary policy would stay tight and authorities were making progress under Zimbabwe’s ten-month IMF Staff-Monitored Program.

The two-month target gives the market a clear benchmark for judging the next stage of the monetary programme. Reserves stood at US$1.4 billion at the end of March, equivalent to 1.5 months of imports, before rising to about US$1.7 billion and 1.7 months by the end of July. The RBZ’s 2026–2030 strategy ultimately targets reserve cover of between three and six months of imports, leaving the December objective as an intermediate step rather than the end point.

Zimbabwe is trying to build that buffer during one of its strongest periods of foreign-currency generation in recent years. Foreign-currency receipts rose 47.8% to US$10.72 billion in the first half of 2026 from US$7.25 billion a year earlier, supported heavily by export earnings. The RBZ has also been accumulating reserves through precious-metal royalties and a portion of exporter surrender proceeds.

The distinction between receipts and reserves matters. The US$10.72 billion figure captures foreign currency flowing through the economy over six months, while the US$1.7 billion reserve figure is the stock held at a particular point in time. Treating the two as directly comparable would overstate what can reasonably be inferred about retention.

The more useful commercial test is whether Zimbabwe can use a period of strong export earnings to build a reserve buffer large enough to absorb the next external shock. Lower commodity prices, drought, higher fuel costs or renewed foreign-exchange pressure would all test how much protection has been built during the current upswing.

That matters directly for ZiG. Larger reserves give the RBZ greater room to manage periods of disorderly foreign-exchange demand, strengthen the asset backing around the domestic monetary system and improve the country’s capacity to fund critical imports when external conditions deteriorate. The central bank also sees reserve cover of three to six months as part of the foundation for a future monetary framework in which the domestic currency carries a larger role.

The timing is favourable for accumulation. Gold and other mineral earnings have strengthened foreign-currency inflows while tighter monetary conditions have kept domestic liquidity growth under greater control. The policy opportunity is therefore to build the buffer while export conditions remain supportive, rather than trying to accumulate reserves once the commodity cycle has already weakened.

Mushayavanhu also said discussions with the IMF over the second-quarter review of the Staff-Monitored Program were progressing well and that authorities expected to meet the required quantitative targets and structural benchmarks. Under the first review, Zimbabwe met all end-March quantitative targets and structural benchmarks covering net official international reserves, the primary fiscal balance, ZiG monetary-base growth and RBZ lending to the non-financial public sector. An indicative target on protected social and priority spending was missed.

That distinction matters for the durability of the current monetary gains. Lower inflation carries greater commercial value when reserve-money discipline, fiscal execution and reserve accumulation continue through successive programme reviews, particularly as economic activity feeds stronger demand for credit, imports and foreign currency.

There is, however, a balance to manage. Foreign currency channelled into reserves is foreign currency that cannot be used at the same time for imports, working capital or private investment. Exporter surrender requirements also reduce the immediate hard-currency liquidity retained by companies generating those earnings.

The quality of the reserve build therefore matters as much as the headline stock. Accumulation strengthens the economy when it increases protection against external shocks without materially constraining the foreign currency available to productive businesses.

The December target offers the first clean benchmark. Reaching two months of import cover would extend a recovery that has taken reserves from below US$300 million in April 2024 to a substantially stronger position within little more than two years. It would still leave Zimbabwe some distance from the RBZ’s medium-term objective of three to six months.

For Equity Axis, the monetary test has now moved beyond bringing inflation down. The next test is whether the period of stability is being used to build the balance sheet required to defend it.

Through December, the numbers worth watching are straightforward: the reserve stock, months of import cover, the parallel-market premium, monetary-base performance under the IMF programme and the amount of foreign currency still reaching the productive economy.

If foreign-currency receipts remain elevated and reserves rise toward two months of imports without renewed exchange-rate pressure or a material squeeze on productive-sector liquidity, the RBZ will have added another layer of protection around the current monetary framework. Moving from there toward three months of cover would provide a tougher test of whether Zimbabwe is building enough external capacity to carry stability through a less favourable economic cycle. - Equity Axis