RBZ applauds declining inflation

The Reserve Bank of Zimbabwe (RBZ) has lauded the continued decline in monthly inflation as a key indicator of growing economic stability, with both local and foreign currency-denominated prices showing positive trends.

According to the Zimbabwe National Statistics Agency (ZimStat), Zimbabwe's weighted average monthly inflation rate dropped to 0 percent in May, down by 0.3 percentage points from April. This stability reflects the success of recent monetary policy interventions.

The US dollar month-on-month inflation also saw a notable dip, falling to -0.3 percent in May from 0.2 percent in April. However, the Zimbabwe Gold (ZiG) currency recorded a slight increase in month-on-month inflation, rising to 0.9 percent, up from 0.6 percent in April.

In a speech delivered on his behalf by Deputy Governor Dr Jesimen Chipika at the Zimbabwe National Chamber of Commerce (ZNCC) 2025 Matabeleland Annual Business Awards (MABAs) in Bulawayo, RBZ Governor Dr John Mushayavanhu attributed the declining inflation to strong monetary policy measures and proactive central bank management.

"Monthly inflation has remained consistently below three percent, enabling a relatively predictable environment for long-term planning and investment," said Dr Mushayavanhu. "The RBZ has ensured relative exchange rate and inflation stability, contributing to macroeconomic confidence."

He highlighted that the parallel market exchange rate premium has been maintained at manageable levels of around 20 percent, and that the RBZ continues to support the economy by meeting foreign currency demands for genuine imports, especially capital and intermediate goods.

Between December 2022 and January 2025, Zimbabwe's monthly imports averaged US$800 million, with 70 percent going towards capital (US$140 million) and intermediate goods (US$470 million). These imports have been instrumental in boosting industrial capacity utilisation, which rose from 36.4 percent in 2020 to above 50 percent since 2021.

The Governor stressed the importance of public-private collaboration to unlock Zimbabwe's full economic potential. "Public-private partnerships are essential in crafting pro-business policies, enhancing competitiveness, and investing in infrastructure and skills development," he said.

He also reaffirmed the RBZ's commitment to a market-determined exchange rate system through the willing-buyer willing-seller (WBWS) interbank arrangement. Recent regulatory reforms have removed trading margins and are aimed at deepening the foreign exchange market to enhance transparency and price discovery.

Dr Mushayavanhu commended the ZNCC for its enduring partnership with the central bank, particularly in Monetary Policy Provincial Stakeholder Engagements, which have helped disseminate key policy measures to grassroots businesses and refine monetary policy strategies.

In remarks delivered on behalf of the Minister of State for Bulawayo Provincial Affairs and Devolution, Judith Ncube, Deputy Director of Administration Mr Julius Gwatiwa applauded the ZNCC awards for celebrating regional economic resilience. He said the theme - "Unlocking Business Potential through Policy, Partnerships and Productivity" - aptly captured the region's developmental aspirations.

ZNCC Matabeleland Vice President Mrs Beauty Bhulu acknowledged ongoing business challenges including price instability, power shortages, and currency volatility, but praised local enterprises for their resilience, adaptability, and innovation in navigating a tough economic climate.

The awards ceremony recognised businesses that have demonstrated excellence and perseverance in driving economic growth in Matabeleland and across Zimbabwe.