BUSINESS REPORTER
The Reserve Bank of Zimbabwe (RBZ) has maintained the bank policy rate at 60% and liberalised the forex market by allowing commercial banks to process external payments below US$1000, according to deliberations of the bank’s Monetary Policy Committee (MPC).
In a statement on Friday, RBZ governor John Mangudya said the Medium Term Bank Accommodation Facility interest rate at 40% has been maintained so were the statutory reserve requirements for demand/call deposits at 10% and at 2.5% for savings and time deposits, respectively.
The bank, Mangudya said, has maintained the reserve money growth targets at 7.5% for the first and second quarters of 2022.
The liberalisation of the forex market will allow commercial banks to process bona fide external payments below US$1000 to augment payments made through bureaux de change and the auction system, Mangudya said.
The bank will also ensure continued synchronisation of Government payments and market liquidity positions in order to “foster strong adherence to quarterly reserve money targets and manage inflation expectations”.
The MPC, which met on February 25, raised concern over increase in broad money and its implications on parallel market activities and inflation.
“In this context, the Committee urged the Bank to continue actively monitoring the developments in broad money in order to vigilantly stem out any resultant speculative activities,” Mangudya said.
He said the MPC noted that the spike in month-on-month inflation from 5.3% in January 2022 to 7% in February 2022 mainly reflected increase in global and administrative prices.
“The current global dynamics, including disturbances in Ukraine, were expected to result in spill-over effects on domestic prices. Such global developments include increases in the international prices of oil, gas, fertiliser and cooking crude oil, products of which Russia and Ukraine are major producers,” Mangudya said.
