By Panashe Chikonyora
The Poverty Reduction Forum Trust (PRFT) urged government to improve on accountability, transparency and balance as ways of refining the monetary policy, which it says is necessary in further reducing the rate of inflation in the country.
In its assessment of the Reserve Bank of Zimbabwe (RBZ)’s monetary policy statement the PRFT said although it acknowledged RBZ’s efforts in reducing Inflation from the peak of 837.5% in July 2020 to 60.7% in December 2021, inflation is still very high. Therefore, PRFT suggested;
“That the RBZ should review the foreign currency auction system taking into consideration stakeholder’s views and conforming to the Dutch Foreign Currency Auction principles which allows for price discovery. This will build confidence in the official foreign exchange market and help bridge the gap between the official and parallel foreign exchange market; Government should allow payment in local currency for all government goods and services to promote the use of the domestic currency; The limit on mobile banking transactions should be increased further in line with the inflation developments; More emphasis should be put on improving access to credit to disadvantaged groups such as women and persons with disabilities; and RBZ and the relevant authorities (Police, Zimbabwe Anticorruption Commission etc.)must deal with abusers of the US$50 facility. On the other hand RBZ must put in place a mechanism for all citizens with genuine foreign currency requirements to be able to access the forex through official channels,” said the Poverty Reduction Forum Trust.
The economy has been deteriorating due serious hyperinflation which has contributed to the increase of poverty in the country.
This has seen the Reserve Bank of Zimbabwe implementing various monetary policy measures, including the recent 7 February 2022 monetary policy statement – themed “Stay the Course”, to try and reduce the rate of inflation.
The monetary policy statement is in line with section 46 of the Reserve Bank Act (Chapter 22:15), which requires the Governor of the Reserve Bank of Zimbabwe (RBZ) to issue a statement outlining the monetary policy stance for the subsequent six months, the reasons for the policies and an evaluation of the previous period monetary policy measures.