Zimbabwe's Central Bank to Uphold Strict Monetary Policy for Economic Growth
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Synopsis
Zimbabwe's central bank is determined to implement a strict monetary policy in 2025, aiming to enhance economic growth, maintain price stability, and support recovery in key sectors.
Key Takeaways
- Strict monetary policy to foster growth in 2025.
- Policy rate maintained at 35 percent.
- Economic growth expected to rise to 6 percent.
- Inflation projected to average below 3 percent.
- Targeted finance facility for wholesalers and retailers.
Harare, Feb 7 (NationPress) The central bank of Zimbabwe has committed to keeping a strict monetary policy to foster economic growth in 2025.
According to John Mushayavanhu, the Governor of the Reserve Bank of Zimbabwe (RBZ), the monetary policy for the first half of 2025 is designed to ensure stability while promoting economic growth.
In alignment with this strict monetary policy, the RBZ will maintain the bank policy rate at 35 percent per annum, with potential adjustments based on inflation trends and market conditions, he noted.
Mushayavanhu emphasized that the central bank's strict monetary policy is essential for maintaining price stability, currency stability, and exchange rate stability while driving economic growth, which is projected to increase to 6 percent in 2025 from 2 percent last year.
The positive growth forecast for 2025 is attributed to the expected stability in prices and exchange rates, as well as a recovery in both the agriculture and power sectors.
Inflation is anticipated to decline further, with monthly averages expected to remain under 3 percent in 2025, in line with exchange rate stability, Mushayavanhu added.
“Due to the base effects from the surge in monthly inflation in October 2024, annual inflation is likely to be high from April to September 2025 before significantly decreasing to between 20-30 percent by year-end,” he explained.
Effective immediately, Mushayavanhu has lifted all restrictions on trading in the foreign exchange interbank market to ensure ongoing stability, as reported by Xinhua news agency.
Additionally, he announced a targeted finance facility aimed at addressing the working capital issues faced by some wholesalers and retailers nationwide, allowing formal retailers and wholesalers to restock.
