RBZ vows to sustain tight monetary policy

Business Reporter

THE Reserve Bank of Zimbabwe (RBZ) has vowed to pursue a tight monetary policy in a bid to sustain economic recovery growth and stability.

The remarks comes against a background where the bank’s Foreign Exchange Auction has managed to wrestle inflationary levels from a high of 837% to a low of 50,3% recorded in June last year.

In a recent update, the RBZ governor said he was not going to leave any stone  unturned in his bid to sustain the stability of the local currency.

“We are monitoring the situation; we cannot relax thinking things will work by themselves –no!We need to continue to tighten , we are going to tighten the monetary policy to ensure that we bring order to the economy,” he said.

The central boss governor said there were a lot of positive signs after recent interventions to address market distortions , adding success will , however , be measures against internal and external dynamics.

“The best way of measuring the success of fiscal consolidation and tight monetary policy is stability in prices for goods and services. Number two , right now we have prices being affected not only by monetary issues.

“So going forward we need to track month on month inflation so that we see whether that month on month inflation is due to exogenous factors or due to internal factors,” he said.

Mangudya said the inflation increases of March 2022 were  due to external factors.

“We are now saying we need to ensure we take measures to tighten money supply and to ensure fiscal consolidation is enhanced. “Volatile exchange rates have recently been stoking inflationary pressures and threatening to undo the huge gains achieved last year,” he added