RBZ maintains policy rate at 60%

…Says economy on course to attaining economic growth

December 7, 2021

BUSINESS REPORTER

The Reserve Bank of Zimbabwe has maintained a bank policy rate of 60% per annum on the positive economic outlook following the stability in exchange rate and domestic prices.

The bank’s Monetary Policy Committee (MPC) met on December 3 where it noted the recent monetary policy measures had reversed the upward trend on month-on month inflation, which rose from 4.2% in August 2021 to 6.4% in October 2021 and decelerated to 5.76% in November 2021, central bank governor John Mangudya said in a statement released on Tuesday.

Annual inflation would end the year 2021 at between 58% and 60% and at less than 20% in 2022, he said.

The MPC maintained the Medium Term Bank Accommodation facility interest rate at 40%. It also maintained the statutory reserve requirements for demand/call deposits at 10% and at 2.5% for savings and times deposits.

The minimum deposit rates for ZWL$ savings and time deposits were also maintained at 10% and 20%, respectively with a view to sustaining the appeal of the local unit as an investment currency.

It also maintained reserve money growth targets at 10% for the fourth quarter of 2021 and the first and second quarters of 2022.

The MPC also affirmed its commitment to continue refining the Bank’s open market operations instruments to support optimal liquidity management.

“In view of the significant increase in total bank deposits during the past year, the Committee also resolved to monitor developments on broad money to minimise its possible destabilising effects on inflation and the exchange rate,” it said.

The last auction for 2021 has been set for December 14. The first auction for 2022 will be on January 11.

The economy has been suffocated by volatile parallel market exchange rates which fuelled a spike in prices.

 

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