The Reserve Bank of Zimbabwe (RBZ) will retain its current monetary policy approach amid improving economic conditions.
The central bank says stable inflation and exchange rates support the decision to maintain its existing stance.
The position emerged during the RBZ’s Mid-Term Monetary Policy Review. The review highlighted stronger economic indicators recorded during the past two years.
Annual inflation reached 4.2 percent by the end of July. Meanwhile, monthly inflation remained at 0.3 percent.
RBZ Governor Dr John Mushayavanhu discussed the figures during a stakeholder breakfast meeting in Harare on Friday.
The RBZ and Confederation of Zimbabwe Industries (CZI) jointly hosted the event.
Mushayavanhu said the latest figures demonstrated the effectiveness of the current policy framework.
“We are not tempted to change course given that we are registering significant wins, especially in the area of inflation where we have maintained a low inflation rate of 0.3 per cent. The exchange rate has always been stable for nearly two years, and we are comfortable with this trajectory,” he said.
CZI backs stability but seeks faster payments
The CZI welcomed the stability created by the RBZ’s current approach. However, the business body wants further action to support private-sector investment.
CZI Chief Economist Dr Cornelius Dube urged authorities to clear outstanding Government arrears.
He said businesses serving Government continue facing challenges because of delayed payments.
“We are aligned with the RBZ and applaud them for bringing this much-needed stability; however, we implore that Government also expedite the settlement of arrears for service providers in the private sector who rely on Government for business,” Dube said.
Dube believes settling those obligations could strengthen business activity. Additionally, faster payments could improve confidence among private-sector companies.
RBZ sets conditions for currency transition
Meanwhile, Mushayavanhu said Zimbabwe would not rush towards a mono-currency system.
The central bank wants stronger economic foundations before accelerating the transition.
Authorities must first sustain low inflation over an extended period. Zimbabwe must also accumulate adequate foreign currency and gold reserves.
Those reserves should provide at least three months of import cover.
Therefore, the RBZ intends to preserve the current stability before introducing major monetary changes.
The latest position signals continuity as Zimbabwe seeks to consolidate gains achieved during the past two years.
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