Zimbabwe to maintain tight monetary policy stance to boost economic growth

"The monetary policy stance for the first half of 2025 is aimed at consolidating stability and supporting economic growth," John Mushayavanhu, Governor of the Reserve Bank of Zimbabwe (RBZ), said in a monetary policy statement on Thursday.

In line with the tight monetary policy stance, the RBZ will keep the bank policy rate at 35 per cent per year, subject to further reviews based on inflation developments and other market fundamentals, he said.

Mushayavanhu stressed that the central bank will continue with the tight monetary policy stance to anchor price, currency and exchange rate stability and boost economic growth, expected to rise to 6 per cent in 2025 from 2 per cent last year.

He said the favourable economic growth for 2025 will benefit from the prevailing price and exchange rate stability and the anticipated recovery in agriculture and the power sector.

Inflation is expected to continue falling, with month-on-month readings projected to average below 3 per cent in 2025, consistent with exchange rate stability, Mushayavanhu said.

"Given the base effects caused by the spike in monthly inflation in October 2024, annual inflation is expected to be elevated from April 2025 to September 2025 before significantly moderating to end the year between 20-30 per cent," he said.

With immediate effect, Mushayavanhu removed all limits on trading on the foreign exchange interbank market to guarantee continued stability, Xinhua news agency reported.

He also said that to address working capital challenges experienced by some wholesalers and retailers across the country, a targeted finance facility has been extended to enable formal retailers and wholesalers to restock.