The Monetary Policy Committee (MPC) of the Reserve Bank of Zimbabwe met on June 26, 2024, to assess the effectiveness of the monetary policy measures announced on April 5, 2024, and to discuss recent macroeconomic and financial developments. The MPC expressed satisfaction with the positive impact of the measures, which have stabilized the exchange rate and domestic prices. Despite the effects of the El Nino-induced drought, the economy has remained resilient and is expected to grow by around 2% in 2024.

The stabilization measures implemented by the Bank since April 2024 have resulted in a month-on-month inflation rate of -2.4% in May 2024. The inflation rate is expected to be around 0% in June 2024 due to declines in both food and non-food inflation. Inflation pressures are expected to remain subdued, with projected inflation to end the year below 5%, as the exchange rate remains stable.

The MPC has resolved to maintain the current tight monetary policy stance to ensure the sustenance of the current stability. The Committee has therefore resolved to maintain the current policy measures, including:

– A Bank Policy rate of 20% per annum and an interest rate corridor of 11% to 25%

– Statutory reserve requirements for demand deposits, savings, and time deposits in ZWL at 15% and 5%, respectively

– Foreign currency statutory reserve requirements for demand deposits, savings, and time deposits at 20% and 5%, respectively

The MPC is committed to proactively addressing any emerging risks to current stability and ensuring that growth in money supply remains consistent with the achievement of pro-growth inflation levels of 5%. The Reserve Bank will continue to ensure full backing of reserve money with gold, other precious minerals, and foreign currency reserves, ensuring that growth in reserve money is consistent with improved economic activity and increased reserves backing the domestic currency.