Zimbabwe: What to Expect From the Monetary Policy

analysis

The Reserve Bank of Zimbabwe (RBZ) governor John Mangudya (pictured) is expected to present the first monetary policy statement of 2021 within the next seven days, at a time when the coronavirus (Covid-19) pandemic has stifled various economic activities in the country. Hopes of returning to normalcy in the current year are fast fading away with local infection and mortality rates still high. This puts pressure on the government to find resources to procure vaccines and achieve some level of immunity which can allow economic recovery.

The last 45 days have also seen significant price increases for fast moving consumer goods and services due to upsurge in fuel prices, growth in money supply and increase in real production costs. As a result, month-on-month inflation rate for January 2021 was 5,43%, gaining from the December 2020 rate of 4,22%. Similarly annual inflation increased to 363%, from 349% as of December 2020.

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