RBZ Tightens Monetary Policy to Combat Rising Inflation

The Reserve Bank of Zimbabwe (RBZ) has announced a decisive tightening of its monetary policy in an effort to curb soaring inflation.

Following a recent meeting of the Monetary Policy Committee (MPC), the central bank has adjusted its key policy rate, which acts as the benchmark for inter-bank transactions, in a bid to rein in excess liquidity and stabilize the economy.

This latest move is part of a broader strategy to reduce the money supply in the market, particularly targeting cash transactions that contribute to inflationary pressures. However, digital payment platforms especially those used for cross-border transactions will not be affected by the new policy, allowing continued fluidity in the global financial landscape.

The RBZ’s measures are also aimed at aligning the country with international anti-money laundering and counter-terrorism financing standards. In addition, the central bank has ramped up efforts to promote a cash-lite economy, emphasizing the use of digital payments as a way to modernize the financial system and improve oversight.

As part of its strategy to support the Zimbabwean Gold (ZIG), the RBZ is working to increase foreign currency earnings and enhance liquidity in the willing-buyer, willing-seller foreign exchange market.

These measures are expected to contribute to price stability, currency stability, and overall economic resilience.