By 
The Reserve Bank of Zimbabwe (RBZ) Monetary Policy Committee (MPC) has resolved to maintain the current course of stability by refraining from implementing new measures.
During the first half of the year, both fiscal and monetary authorities diligently implemented a series of measures to address unsustainably high inflation rates and a depreciating exchange rate, which had led to the decline of the local currency (ZWL). By employing strategies such as reducing money supply, introducing gold-backed digital tokens, and promoting the use of the local currency for tax payments, positive outcomes have been achieved.
As a result of these measures, the ZWL has shown signs of recovery, with the exchange rate now at US$1: ZWL 4,505, representing a significant improvement from the high of US$1: ZWL 8,000 around June 2023.
The impact of these actions is evident in the inflation figures, with month-on-month inflation falling from a peak of 74.5% in June 2023 to minus 15.3% in July 2023. Similarly, annual inflation decreased from 175.8% in June 2023 to 101.3% in July 2023.
RBZ Governor John Mangudya, in a statement released after a meeting on Friday, emphasized the strength of the current economic fundamentals to sustain the prevailing stability. These include an expected robust economic growth of 5.3% in 2023, a favorable balance of payments position, and fiscal sustainability.
Considering the positive inflation and exchange rate developments, the MPC has resolved to maintain the current tight monetary policy stance and allow sufficient time for the existing measures to fully impact the dual currency economy.
The committee pledges to remain vigilant against potential shocks and will implement appropriate safeguard measures to ensure continued progress towards achieving price and exchange rate stability, thereby bolstering confidence in the economy.
In conclusion, the MPC will regularly review monetary policy measures in response to inflation developments and monetary conditions, ensuring a proactive approach to sustain the economic stability achieved thus far.
Comments