Zimbabwe News Update
herald
6 min read
Business ReporterThe Reserve Bank of Zimbabwe (RBZ) is implementing a “strategic thrust” focused on establishing a solid national currency, rebuilding market confidence and aligning its economic framework with international standards, the Deputy Director of Strategy and Policy at the bank, Mr Albert Norumedzo, said at a media workshop underway.The comprehensive strategy is designed to combat economic volatility and directly tackle the “confidence deficit” currently permeating the economy.Mr Norumedzo said the central bank’s actions are explicitly geared towards fulfilling national goals set out in Vision 2030 and the National Development Strategy (NDS1/2).He said a cornerstone of the new policy is the commitment to “building resilience” in the Zimbabwe Gold (ZiG) currency through the accumulation and maintenance of significant reserves.Mr Norumedzo confirmed the RBZ is actively building its foreign currency and precious metal holdings to provide a vital “buffer” against external economic shocks, such as commodity price fluctuations.The official explained that the currency’s name, Zimbabwe Gold, reflects the country’s contribution of gold to its reserves, noting that the central bank’s latest communication indicated foreign currency reserves were nearing US$1 billion.These reserves are considered crucial to absorbing shocks and ensuring the sustainability of the monetary policy framework, he said.Mr Norumedzo said the overall strategic direction is structured around four key areas such as solid and stable national currency, stable and sustainable macro-economy, restoring policy credibility, rebuilding market confidence and trust as well as a stable and sustainable exchange rate.He said to compete effectively for capital and investment, the RBZ is determined to achieve regional and global macroeconomic convergence.
This involves setting aggressive targets to align the country’s economic performance with that of its neighbours, particularly within the SADC region.This alignment includes achieving single-digit inflation, ideally between 3 percent and 7 percent, to make the country’s macroeconomic environment competitive. The convergence targets are informed by frameworks established by bodies such as SADC, COMESA, and the Association of African Central Banks.Crucially, Mr Norumedzo emphasised that no policy can succeed without public support, pointing to the persistent lack of trust among economic agents. He described the challenge as a breakdown of faith akin to “players distrusting their coach”.To overcome this, the new strategy champions effective communication and consultation as a core tool.
The Deputy Director called upon the media to act as a clear, factual and consistent “interface” to the public, stressing that rational and timely communication is essential to shaping inflation expectations and preventing panic-driven market behaviour, which can cause artificial shortages and undermine policy.He cited a previous incident in the mining sector where unverified negative media reports led to international barriers and significant financial losses, underscoring the profound responsibility of information dissemination in supporting national economic objectives.Leave a ReplyCancel reply
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