Low inflation, stability possible: MPC

Darlington Musarurwa

News Editor

ACHIEVING a stable currency and low levels of inflation is possible if Government remains disciplined, the Monetary Policy Committee (MPC), a key advisory organ of the Reserve Bank of Zimbabwe (RBZ), has said.

In a statement on Tuesday after the end of its inaugural meeting, the MPC said though the economy had been affected by the twin weather calamities of drought and Cyclone Idai, it had capacity to generate enough foreign currency to support a stable exchange rate.
“The committee noted that key basic economic fundamentals remain sound, and in place for the country to meet its stabilisation and development objectives,” said the MPC.
It has since recommended measures to ensure that the amount of money that circulates in the economy is contained within levels that ensure a stable exchange rate.
Among some of the key recommendations made are to print enough notes and coins for the convenience of the public, including fine-tuning the interbank market to make foreign currency readily available.
Currently, the ratio of cash to overall money in circulation is 4 percent, which is considered to be relatively lower than regional and international levels of between 10 percent and 15 percent.

The nine-member MPC is chaired by Central Bank governor, Dr John Mangudya.

Other members include the RBZ deputy governors; Dr Kupukile Mlambo and Dr Jesiman Chipika, industrialist and businessman Kumbirai Katsande, ex-Government advisor and economist Professor Ashok Chakravati, former ABC Holdings chief executive Doug Munatsi, economist and former Bulawayo South legislator Eddie Cross, Professor Theresa Moyo and Mrs Marjorie Ngwenya.

The MPC was established in terms of the Reserve Bank of Zimbabwe (RBZ) Act, Section 29B, subsection (1), which also requires committee members to have sound knowledge, experience or expertise in finance, banking and fiscal or monetary policies.