By Amanda Jojo
Reserve Bank of Zimbabwe (RBZ) has introduced new monetary policy measures, and through the measures the bank is optimistic that the anticipated economic growth of 7.4% is achievable.
The measured optimism is based on the expected significant growth of the agricultural output in 2021 as a result of the good rainy season, fiscal sustainability and the Bank’s focus on price and financial stability.
In the Statement, RBZ Governor John Mangudya said the primary focus of the MPS is to ensure that inflation is under control and that the foreign exchange auction system is sustained to support the growth of the economy.
“While prospects for a faster recovery in the economic performance in 2021 are high, on account of a strong balance of payments position and good agriculture season, the down-side risks cannot be overlooked,” said Mangudya.
The down-side risks are accrued to the new wave of the Covid-19 pandemic and its adverse impact on the economy which are a cause of concern.
Basing on the previous monetary policies, in their weekly review, Zimbabwe Coalition on Debt and Development (ZIMCODD) highlighted that the policies fail because the economy is excessively informal.
“Formalised monetary policy measures are not observed in the underground economy, vast financial resources circulate in the informal sector and evade the control of the fiscal authorities,” read the ZIMCODD review.
The measures contained in the Monetary Policy Statement are also consistent with the objectives of the National development Strategy 1.
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