By KETTY NYONI
THE Reserve Bank of Zimbabwe (RBZ) projects the country’s inflation to further decline in the second half of the year as a result of its fiscal measures to stabilise the foreign exchange market.
Since last year, the central bank has been fighting to stabilise the forex exchange market in a bid to maintain inflation figures in check.
However, with the exchange market instability emanating from the parallel market pressures, the first half of 2022 saw inflation steadily accelerating from 60, 7 percent in January to 191, 6 percent in June 2022.
But in a statement yesterday following the Monetary Policy Committee (MPC) meeting last Friday, RBZ governor John Mangudya said with month-on-month inflation having declined from 30, 7 percent in June 2022 to 25, 6 percent in July 2022, the Monetary Policy Committee (MPC) had noted that “the progressive decline will continue in the outlook period as a result of the tight monetary policy stance being pursued by the Bank”.
“The MPC also noted that the disinflation trend will be reinforced by measures Government was taking to deal with factors that destabilise the foreign exchange market, particularly by reviewing the basis and framework for payments to its suppliers of goods and services in its quest to stabilise the foreign exchange market and enhance value for money.
“The MPC further noted that whilst monthly inflation is expected to continue to decelerate during the outlook period, annual inflation will continue to increase up to September 2022 as a result of the lower base effect in 2021
“In view of the said developments and outlook, the MPC resolved to maintain the interest rates at current levels”.
Mangudya further said that in his effort to stabilise the economy, the apex bank would increase the number of gold coins to be poured in the market, as they have registered a promising demand.
“The tight monetary policy stance would be buttressed by the favorable uptake of gold coins which were introduced in the economy on 25 July 2022 as an alternative stable financial product for store of value.
“A total of 1500 gold coins were sold by the Bank’s agents during the first week of their release into the market, with 85 percent having been bought in local currency and the balance of 15 percent in foreign currency.
“Additional 2000 gold coins will be released into the market during the week commencing 1 August 2022,” Mangudya said. – Daily News