Government, through the Ministry of Finance and Economic Development, has come up with measures to enhance confidence in the country’s economy with an aim of attaining an economic growth rate following the month-on-month inflation as a result of a number of global shocks.
In a press statement yesterday, Reserve Bank Governor, Dr John Mangudya revealed that the Monetary Policy Committee (MPC) welcomed Government initiatives to deal with market indiscipline.
“The Committee, therefore, welcomed the decision by Government to come up with measures to enhance confidence in the economy, deal with market indiscipline and increase the demand for the local currency, which measures will go a long way in buttressing the current tight monetary policy stance, restoring confidence in the economy, taming market indiscipline, stabilizing inflation and exchange rates and creating a conducive environment to support the envisaged economic growth rate of 5.5% in 2022,” Mangudya said.
In the same vein, the Committee undertook to support Government and maintain the status quo in respect of the monetary policy decisions to maintain the Bank Policy Rate, Maintain the foreign payment transaction limits among others.
Dr Mangudya recounted efforts taken by the committee to assist Government in its initiative to rebuild confidence in the country’s economy.
“Maintaining the Bank Policy Rate at 80% and the Medium-Term Accommodation Facility Interest Rate at 50%; Maintaining the minimum deposit rates for ZW$ savings and time deposits at 12.5% and 25% per annum, respectively; Maintaining the quarterly reserve money growth target at 5% for the quarter ending June 2022; and Maintaining the foreign payment transactions limit on the willing-buyer-willing-seller foreign currency trading arrangements for banks and bureau de change at US$1000 and allowing the Bank to increase the limit as conditions permit,” said the Governor.
Meanwhile, despite the global challenges such as Covid 19, the Russia/Ukraine conflict and the exchange rate depression on the parallel market, the country has managed to remain strong with the money supply remaining under control, while the reserve money continues to be stable at levels of around ZW28 billion for the past 6 months.