Strict adherence to tight monetary policy imperative – economists
By Davison Vandira
ECONOMISTS have underscored the need to maintain the current macroeconomic stability, urging fiscal and monetary authorities to harness policy consistency for continued economic progress.
The call by economists to pursue enhanced inflation insulating measures and Zimbabwe dollar value preservation policies is being motivated by the need to maintain the status quo concerning exchange rate stability.
High market sensitivity to monetary shocks has in the past been breeding macroeconomic volatility to the detriment of economic development, hence the need for policy consistency that supports national development aspirations as spelled out by Vision 2030.
Measures implemented since July 25 have worked wonders in instilling confidence in the functionality and acceptability of the Zimbabwe dollar.
Economists are therefore imploring authorities to ensure monetary policy consistency to avoid vicious cycles of propelling adverse inflation expectations.
The pass-through effects of exchange rate instability perpetuated undesirable increases in inflation, hence the need to strictly pursue a tight monetary policy stance.
“The obtaining macro-economic situation over the past month due to measures being implemented are commendable and should therefore be preserved by any possible means as experiences of the past were counter-productive and our future policies should avoid those situations,” said Dr Prosper Chitambara, a development economist.
“For Zimbabwe to be able to meet its economic objectives, it is imperative to maintain the status quo to sustain the country’s economic journey, especially the second half of this year, ” said Kudakwashe Mugova, an economic analyst.
Zimbabwe’s fiscal and monetary authorities are implementing various policy initiatives to strengthen the macro-economic environment for enhanced stability.