Zimbabwe’s Economy on Track: MPC Maintains Tight Monetary Policy

By Enia Dube

 
The Reserve Bank of Zimbabwe’s Monetary Policy Committee (MPC) recently convened to assess the country’s macroeconomic and financial landscape. The committee expressed satisfaction with the positive impact of their previous measures, aimed at stabilizing the economy.

During the meeting, the MPC decided to maintain statutory reserve requirements for demand deposits and savings and time deposits in foreign currency at 20% and 5%, respectively. This decision underscores the committee’s commitment to a tight monetary policy stance, essential for supporting economic growth. 

Zimbabwe’s economic performance has shown promise, with the real GDP growth rate for 2021 revised upwards to 6.0% from the initial 5.1%. This upward revision reflects the country’s resilience amidst global economic uncertainty. 

However, the global economic outlook remains cautious, with expected growth rates slowing to 3.2% in 2024 and 3.3% in 2025. This slowdown is primarily driven by tightening monetary conditions aimed at curbing inflation.

In Zimbabwe, annual inflation rates have fluctuated, decreasing from 30.9% in June 2023 to 17.8% in October 2023. However, inflation later increased to 26.5% in December 2023 and 47.6% in February 2024, largely due to exchange rate volatility. 

The MPC remains committed to implementing prudent monetary policies to stabilize the economy and mitigate inflationary pressures. Through these efforts, Zimbabwe aims to maintain economic stability and foster growth.