The Reserve Bank of Zimbabwe (RBZ) is set to announce new measures aimed at ensuring long-term price stability, fostering economic growth, and building market confidence, as Governor Dr. John Mushayavanhu prepares to present the bank’s 2025 Monetary Policy Statement (MPS) later this month.
Zimbabwe has been facing numerous economic hurdles, notably inflation, high financing costs, limited liquidity, shortages in foreign currency, and challenges in key industries like manufacturing and agriculture.
The upcoming MPS is expected to provide insights into the central bank’s strategy for addressing these persistent economic issues, offering businesses, investors, and the public a clearer picture of the bank’s plans.
Dr. Mushayavanhu spoke to The Herald Finance and Business, highlighting that the bank’s approach will aim to strike a balance between stimulating economic growth and maintaining macroeconomic stability.
“In a context where high inflation coexists with recovering economic output, our monetary policy must be both flexible and well-calibrated,” he explained. “We are tasked with the dual challenge of curbing inflation without stifling the progress made in economic recovery.”
Zimbabwe’s economic struggles mirror those faced by many nations worldwide in the aftermath of the COVID-19 pandemic, compelling the central bank to take thoughtful steps to balance growth with price stability. This challenge is also reflective of global economic and geopolitical factors.
Across the world, central banks have grappled with finding a balance between tight monetary policies aimed at controlling inflation and the risk of hindering economic growth.
“Efforts to lower inflation often come with the risk of slowing down economic activity. This requires a delicate balance that responds precisely to evolving economic conditions,” Dr. Mushayavanhu added.
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To address some of these challenges, the RBZ introduced the Targeted Finance Facility (TFF), which aims to boost production while stabilising inflation and exchange rates.
The bank’s ambitious goal of achieving 6% economic growth in 2025 is in line with the TFF.
The RBZ governor stated, “Our approach is customised and not a one-size-fits-all solution.” “We are focusing on sector-specific measures to support those areas with the highest potential for growth while minimising the impact of necessary monetary tightening.”
The MPS will outline steps to navigate the complex relationship between monetary policy restrictions and economic expansion.
“We must remain ready to adjust our policy stance as the risk landscape changes. Our goal is to chart a sustainable growth path while anchoring inflation expectations,” Dr. Mushayavanhu noted.
The latest inflation figures underscore the urgency of these efforts. According to the Zimbabwe National Statistics Agency (ZimStat), the ZiG Consumer Price Index (ZiG CPI) rose to 183.76 in January 2025, up from 166.30 in December 2024, representing a month-on-month increase from 3.7% to 10.5%.
The US dollar CPI also saw a rise, climbing from 108.91 to 121.43, with the monthly inflation rate increasing from 0.6% to 11.5%.
The weighted CPI, which combines both the ZiG and US dollar indices, grew from 112.39 to 125.40, reflecting an 11.6% increase.
“These numbers reflect the dynamic interaction between local and foreign currency transactions, highlighting the ongoing economic changes,” ZimStat stated.
These trends suggest both opportunities and uncertainties. The RBZ’s planned measures, including the TFF and the upcoming MPS, indicate that the central bank is keenly aware of the current economic challenges.
“Our policies are crafted to foster a resilient recovery, balancing the need for growth with the critical requirement of stability in these challenging times,” Dr. Mushayavanhu concluded.
