WATCH: RBZ signal to hold policy line despite single-digit inflation

THE Reserve Bank of Zimbabwe (RBZ) will only move to adjust its policy rate stance when it is convinced that price stability gains are durable, Deputy Governor Dr Innocent Matshe has said, urging patience from businesses eager for an immediate shift in interest rates.

His remarks come as Zimbabwe records single-digit annual inflation, a milestone widely viewed as a key anchor for macro-economic stability and a foundation for sustainable growth.

Speaking in Bulawayo on Thursday, Dr Matshe said while the inflation breakthrough is significant, the central bank will rely on consistent data trends rather than a single positive reading before signalling any change in the bank policy rate.

“Now, the question would be, we have just entered the single-digit inflation.

“The question is, should we start now adjusting the bank policy rate?
“I know that is where companies want to go immediately.

“So, let me assure you that the bank will, in time, you know, give the signals of when it thinks it is prudent to do so because you do not immediately adjust because you have e attained that,” he said.

He stressed that policy decisions must be guided by sustained evidence to avoid creating uncertainty in the market.

“It has to be durable enough. So you need more than one data point in order to respond.

“Because what you do not want is to react immediately, and you reverse when things do not go well.

“That is dangerous because now you’re confusing business.”

Dr Matshe said the current single-digit inflation environment is playing a crucial role in maintaining positive real interest rates — a key pillar of financial sector confidence.

He noted that positive real rates are essential for value preservation, investment growth and overall financial stability, as they protect savings and support long-term capital formation.

Economist Professor Gift Mugano weighed in, backing the central bank’s cautious approach and arguing that policy consistency is more important than short-term sentiment.

Professor Mugano said, “In our view, we think the policy rate will remain unchanged throughout 2026. There is a need to entranch stability, it has tobe staggered. It is not about how you feel, but it takes time.”

The central bank’s emphasis on durability and predictability is expected to strengthen confidence among investors, lenders and corporates, as authorities seek to consolidate stability, preserve the value of the local currency and sustain Zimbabwe’s broader economic recovery trajectory.