Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) latest Monetary Policy Statement has reiterated the commitment to sustained stable exchange rates and sanity in the markets going into the remaining second half period of the year.
Presenting the blueprint Wednesday, RBZ governor John Mangudya said the dossier is a complimentary approach to earlier policies which have re-oriented the country onto the right track to macroeconomic stability.
“As such, the Bank is staying the course to price stability by maintaining the current tight monetary policy stance during the six months to December 2023, with fine tuning on open market operations to ensure attainment of the full benefits of monetary and fiscal consolidation to sustainably anchor inflation and exchange rate expectations,” he said.
The use of interest rates to regulate the cost of money and aggregate demand conditions to achieve the desired inflation levels while making the use of Open Market Operations (OMO) that includes NNCDs, gold coins, Gold Backed Digital Tokens and the Wholesale Auction system to stabilise the exchange rate would remain on course.
The current bank interest policy rates currently at 150% was maintained with the medium-term accommodation lending rate for the productive sectors including individuals and MSMEs set at 75%.
The deposit interest rates on savings and time deposits are currently at 30% and 50% per annum, respectively.
Non-Negotiable Certificate of Deposits (NNCDs) instruments currently being used to mop excess local currency liquidity are expected to play a pivotal role towards sustained stability.
Monthly inflation is expected to continue to moderate during the second half of the year to pre-May 2023 levels of less than 3%.
Annual inflation is also expected to continue to decline and end the year between 60% and 70%.
The Bank said it is granting a moratorium to all tourism operators who have unregistered tourism agreements and unapproved offshore accounts to regularise the agreements and offshore foreign currency accounts before 31 August 2023.
Said Mangudya,”The Bank is maintaining the current monetary policy stance and fine-tuning the open market operations to ensure the full benefits of the policy measures put in place by the Bank and Government to sustainably anchor exchange rate and inflation expectations.
“The economic fundamentals remain strong as attested by robust GDP growth, healthy BOP, fiscal sustainability, improved foreign currency receipts and continued monetary restraint,” he said.
He added that the strong macroeconomic fundamentals, coupled with a strong commitment by the Bank and Government to stay the course of monetary and fiscal consolidation will durably sustain the current stability of domestic consumer prices and the exchange.
