RBZ targeting SADC inflation bands

Tapiwanashe Mangwiro

The Reserve Bank of Zimbabwe (RBZ) is angling to align its inflation rates with the Southern African Development Community (SADC) targets, as disclosed by Dr. Innocent Matshe, Deputy RBZ Governor, during the recent Monetary Policy Symposium organised by the Tripartite Negotiating Forum (TNF) in Harare last Friday.

Dr. Matshe emphasised the RBZ’s dedication to maintaining strict monetary policies.

“The Reserve Bank is committed to walking the talk to never issue a single ZIG outside the reserves that we hold to back that ZIG,” he stated.

This strategy underscores the RBZ’s resolve to stabilise the economy by ensuring that their monetary base is fully supported by actual reserves.

The goal is to achieve an inflation rate that not only stays positive but also adheres to the SADC guidelines, which recommend an inflation band of three to seven percent.

“Therefore, we expect that inflation will continue to come down and settle at an equilibrium level, which is above zero, which is a positive, but should be in line with the SADC guidelines, which is between three and seven percent,” Dr. Matshe added.

This move comes as Zimbabwe continues to grapple with economic challenges, including high inflation rates that have plagued the country for years. By aiming for the SADC inflation targets, the RBZ hopes to foster economic stability and predictability, which are crucial for both local and foreign investments.

The commitment by the RBZ to adhere to these inflation bands signifies a robust approach towards economic reform, aiming to restore confidence in Zimbabwe’s monetary system and promote sustainable economic growth.