By Tinomudaishe Muzanenhamo
Reserve Bank of Zimbabwe Governor John Mushayavanhu says strict monetary controls are beginning to stabilise the economy, with inflation easing to single-digit levels for the first time in years.
Presenting the 2026 Monetary Policy Statement, Mushayavanhu said tight control of money supply and liquidity management had been central to slowing inflation and restoring confidence in the country’s financial system.
The governor told stakeholders that the bank had largely met its own monetary targets, keeping money supply growth within planned limits.
“We have managed to live within those standards,” he said, referring to annual money supply benchmarks set by the central bank.
According to the RBZ, economic stability has improved following the introduction of the Zimbabwe Gold (ZiG) currency in April 2024 alongside a tighter monetary framework aimed at limiting excess liquidity in the market.
As part of those measures, the bank raised its policy interest rate from 20% to 35% in September 2024 a move authorities say helped curb inflationary pressures and stabilise the exchange rate.
Dr Mushayavanhu said the RBZ had also introduced what it calls an “optimum liquidity level”, a technical benchmark derived from historical banking transaction data to guide market liquidity.
“We set for the market what we call the optimum liquidity level based on historical transactions,” he explained, adding that trading activity had largely remained within the targeted range.
Responding to persistent complaints from businesses over cash shortages, the governor argued that available liquidity was in fact underutilised.
“Banks have not been able to exhaust that liquidity,” he said, noting that the system was carrying an average daily surplus of about ZiG2 billion.
The central bank reported that money supply growth slowed sharply to 2.7% in 2025, compared with levels exceeding 40% in previous years — a development officials link directly to declining inflation.
Latest figures from the Zimbabwe National Statistics Agency show annual inflation fell to 3.8% in February 2026, down from 4.1% recorded the previous month.
The RBZ says maintaining disciplined monetary policy will remain key as Zimbabwe seeks to consolidate price stability and align with regional inflation benchmarks after decades of economic volatility.
