‘Keep monetary policy tight’
LIVINGSTONE MARUFU
The Reserve Bank (RBZ) is expected to keep monetary policy firmly tight, with economists and business leaders strongly backing the stance as critical to entrenching price stability, restoring currency predictability and safeguarding broader macroeconomic stability after years of damaging volatility, Business Times can report.
The central bank governor, Dr John Mushayavanhu, is expected to unveil the 2026 Monetary Policy Statement later this month.
It comes at a time Zimbabwe recorded a single-digit local currency inflation rate of 4.1% in January, down from 15% in December 2025, a feat largely attributed to the RBZ’s prudent monetary framework.
Analysts, however, are urging the central bank to gradually adjust the policy rate and allow greater market influence on the exchange rate.
“The strategies and policy stance adopted by the Reserve Bank in the past year has worked. Inflation is down, the currency stable and because of this I expect that they will maintain their position,” economist Eddie Cross told Business Times:
Malone Gwadu, another economist, said the tight monetary policy had achieved macroeconomic stability and should continue:
“I think the RBZ Governor will likely hold the fort in terms of a generally tight monetary policy stance as he seeks to entrench price stability, currency predictability and overall monetary policy certainty as exuded by recent comments wherein it was signalled that any changes on the current policy regime has to be backed by proven track record of market certainty.”
Yet another economist Enock Rukarwa noted that the RBZ has successfully anchored inflation and exchange rate volatility over the past two years through contractionary measures:
“What we expect for 2026 going forward is obviously to maintain that same policy thrust, though with some semblance or level of flexibility, especially on exchange rate and also interest rate. Because we should get to a point whereby we say the numbers are now satisfactory and as an economy we should try to sustain those numbers with a market set up or a free market structure where price dynamics and also interest dynamics, exchange rate dynamics, they are determined by the invisible hand as opposed to a command system where government is to stifle other sectors for it to achieve certain objectives.”
Rukarwa added that liquidity management must evolve to allow markets to operate independently while interventions occur only when necessary:
“RBZ is hindered around this and it is our hope and prayer that they will follow a liquidity management stance whereby they intervene when necessary.”
Business leaders also backed a continuation of the tight policy stance. Zimbabwe National Chamber of Commerce president Tapiwa Karoro said:
“As a business, our expectation is that the 2026 Monetary Policy Statement firmly consolidates the disinflation gains while avoiding policy over-tightening that constrains productive activity. Inflation has eased materially, yet monetary conditions remain highly restrictive through elevated interest rates and statutory reserve requirements. With growth projected at around 5% in 2026, policy calibration should progressively shift from crisis containment to growth-compatible stability.”
Karoro stressed that while targeted facilities are useful, broader reforms are needed to strengthen private sector investment and market confidence:
“We also expect clear reinforcement of ZiG stability through transparency, predictability, and sound liquidity management. Exchange rate stability must be underpinned by market confidence, timely data disclosure, and disciplined reserve accumulation. A gradual easing of reserve requirements, improved accessibility of ZiG liquidity, and credible signals on convertibility will strengthen trust in the financial system and deepen intermediation. Stability should increasingly be sustained by fundamentals, not exceptional controls, to support durable growth.”
