By Davison Vandira
THE Reserve Bank of Zimbabwe Monetary Policy Committee has made far reaching resolutions to foster coordination between fiscal and monetary authorities as the central bank maintains a tight monetary policy framework.
The Reserve Bank of Zimbabwe’ rationality in maintaining the status quo is driven by the need to plug the recent adverse macro economic and financial developments in Zimbabwe, particularly year on year inflation which has moved from 72.7% to 96.4%.
The central bank is pinning hopes of a turnaround on the strong economic fundamentals that have seen the economy receiving US$2.4 billion in foreign currency during the first quarter of the year.
US$1.8 billion were foreign payments, with the country now sitting on a cumulative forex surplus and reserves to the tune of US$1.9 billion.
RBZ Head of Communications Mr Khumbulani Shirichena disclosed that the resolutions were motivated by the need to stem the effects of global shocks.
“The fiscal and monetary authorities are looking to deepen their policy coordination hence this is the reason why a strict monetary policy stance will continue to be pursued to reign in these macroeconomic challenges,” he said.
According to the central bank, the economy’s money supply growth has remained constant at ZWL28 billion for the past six months, while broad money supply fell from 384% to 151%, confirming it a sufficient condition for enhanced stability.