Inflation continues its downward trend projected below 55% in July, the Reserve Bank of Zimbabwe’s Monetary Policy Committee (MPC) said.MPC chairman and RBZ Governor Dr John Mangudya said: 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.
At its latest meeting held on April 30, the MPC noted with great satisfaction the reduction in the annual inflation rate, reaching 194 percent in April from 240,1 percent in March.
Zimbabwe’s month-on-month inflation rose rapidly through 2019 and in the first eight months of last year, before the auction system kicked in and produced exchange rate stability, with the resulting monthly inflation rates being low since September, with August as a transitional month between the very high July monthly figure and the very low September figure.
By July this year, all the 12 monthly jumps in the annual inflation calculation will be from the low months, hence the prediction of 55 percent.
The MPC also reaffirmed its strong commitment to continue with the conservative monetary policy stance to ensure that the current price stability was 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 a year.
In an effort to support micro, small and medium enterprises, 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.
These smaller borrowers will access the facility from banks and micro-finance institutions at 30 percent a year.