- Price stability expected to prevail in the last quarter of 2020
- Foreign exchange auction improves the availability of foreign exchange
- Measures installed to buttress price and financial system stability
The Committee is expecting the price stability to continuously prevails in the economy in the last quarter of 2020 on the basis of the improved operating business environment brought about by the foreign exchange auction system.
After 3 months of a fixed exchange rate, which RBZ said was induced by COVID-19 lockdowns, the Bank restored the Interbank forex market with some modifications towards the end of June 2020.
Since then the exchange rate has moved from 57 to 81, a 16-week period. However, over the latest 6 weeks, the rate has largely stabilised and the local currency has recouped circa 2.5% in value.
At its latest meeting, the MPC resolved to put measures to buttress price and financial system stability and financial system stability in order to stimulate the country’s economic recovery system:-
- a) Maintaining a status quo on both the policy rate for overnight accommodation at 35% and the medium-term lending rate for the productive-sector lending at 25%.
- b) Approving additional funding for an amount of ZW$2.5 billion under the Bank’s medium-term lending facility to support the productive sectors and promote economic recovery.
- c) Maintaining the limit of ZW$5000 per transaction for mobile money transactions and adopting a weekly limit of ZW$35000.