Market News
Zimbabwe central bank keeps policy tight to limit impact of fuel price increases - REUTERS
BY Chris Takudzwa Muronzi
HARARE (Reuters) – Zimbabwe’s central bank decided to keep a tight monetary policy stance on Tuesday, leaving its main lending rate at 35% to limit the inflationary impact of fuel price increases caused by the Middle East conflict.
The Southern African country’s annual inflation rate has slowed sharply in recent months, falling to single digits for the first time in over three decades.
Before the U.S.-Israel war against Iran the central bank had been expected to soon start to ease policy, but economists now think it will focus on trying to ensure stability in the wake of fuel price hikes by the energy regulator.
“To limit the second-round effects of the fuel price increases … the MPC (Monetary Policy Committee) resolved to ‘Stay the Course’ of the current monetary policy stance,” it said in a statement.
The bank’s policy rate has been at 35% since September 2024 as part of efforts to rein in price pressures and bolster confidence in a new currency launched two years ago.
