MPC optimistic inflation will continue to slow

The Reserve Bank of Zimbabwe’s Monetary Policy Committee is confident the prevailing slowdown in inflation is likely to continue and is now forecasting inflation to slow down to 55 percent by July this year.

At its latest meeting held on the 30th of April 2021, the MPC noted with great satisfaction the reduction in inflation. At the last count in April, annual inflation slowed to 194 percent from 240.1 percent in the previous month of March 2020.

“The Committee reaffirmed its commitment to sustaining the disinflationary path to the end of the year and expects year-on-year inflation to go down to below 55 percent by July 2021,” reads part of the MPC’s press statement signed off by its chairman and RBZ Governor Dr John Mangudya.

The MPC also reaffirmed its strong commitment to continue with the conservative monetary policy stance to ensure that current price stability is maintained.

With inflation slowing as intended, the MPC resolved to maintain the Bank policy rate at 40 percent and the interest rate on the Medium Term Accommodation Facility at 30 percent per annum.

Meanwhile in an effort to support Micro, Small and Medium Enterprises (MSMEs), the MPC approved a facility of $500 million for term finance for purposes of enhancing production and productivity across all the sectors of the economy.

The MSMEs will access the facility from banks and microfinance institutions at 30 percent per annum. source www.ebusinessweekly.co.zw