Zimbabwe’s central bank said Tuesday it expects annual inflation to further decline and reach a low of 55 percent by July 2021.
The bank was also satisfied with the disinflationary trend, as inflation had fallen from a peak of 837.53 percent in July last year to 194 percent last month, the monetary policy committee (MPC) of the Reserve Bank of Zimbabwe said in a statement.
“The committee reaffirmed its commitment to sustaining the disinflationary path to the end of the year and expects year-on-year inflation to go down to below 55 percent by July 2021,” the bank said.
Zimbabwe’s annual inflation has been on a downward trend since August 2020 following the introduction of a foreign exchange auction trading system in June of that year that has helped to bring stability to the foreign exchange market.
To support economic activity and the current stability in the economy, the central bank said it will maintain its main lending rate at 40 percent and the interest rate on the medium-term accommodation facility at 30 percent.
The bank also approved a financing facility for small and medium enterprises to boost productivity.
“The MPC reaffirmed its strong commitment to continue with the conservative monetary policy stance to ensure that the current price stability is maintained,” the bank said.