Online Reporter
Tapiwanashe Mangwiro
The Reserve Bank of Zimbabwe (RBZ) has kept its benchmark interest rate unchanged at 35 percent, reaffirming its tight monetary stance to curb inflation and maintain exchange rate stability.
In a mid-term monetary policy review released Thursday, Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu said the policy rate is well-calibrated based on inflation and output dynamics, adding that it delivers a positive real interest rate of 5 percent given the year-end inflation projection of 30 percent.
“The current tight monetary policy stance has been informed by the need to address previous episodes of exchange rate and inflation volatility and durably entrench price stability,” Dr Mushayavanhu said.
The central bank reiterated its “Back-to-Basics” framework, using reserve money control to stabilise the ZiG/US$ exchange rate.
“For the avoidance of doubt, the Reserve Bank is not using the exchange rate as the operational target,” said Dr Mushayavanhu. “We are using a market-determined floating exchange rate and only influencing its movement through ensuring prudent management of reserve money.”
Despite stakeholder calls to lower interest rates and bank charges, the central bank maintained its minimum deposit rates and pushed banks to enhance digital efficiency and reduce costs. Savings interest rates were held at 5 percent for ZiG and 2,5 percent for US dollar deposits.
The bank also kept foreign currency surrender requirements for exporters at 30 percent and defended the use of statutory reserves to mop up excess liquidity.
“We will continue to walk the talk,” the Governor said, indicating the Reserve Bank would respond flexibly to incoming data but would not hesitate to stay the course to preserve the current stability.
The statement underscores Zimbabwe’s continued focus on monetary discipline amid a broader de-dollarisation effort expected to be detailed in the upcoming National Development Strategy II.
Online Reporter