Stabilising inflation and the exchange rate are the top priorities of the Reserve Bank of Zimbabwe (RBZ) this year.
Speaking before the Parliamentary Portfolio Committee on Budget, Finance and Economic Development yesterday, RBZ Governor Dr John Mangudya said they had put in place measures to liberalise the exchange rate.
“In 2020, our key focus areas are of reducing inflation and stabilising the exchange rate so that there is conducive economic environment for businesses and consumers,” he said.
“We are using the Monetary Targeting Framework basically for controlling of liquidity or control of money supply in the economy. By so doing we don’t expect to increase money supply in the economy, which stirs inflation. If we contain inflation under this framework, it means that we would be targeting an increase in money supply which is commensurate with the inflation that we desire in 2020.
“We expect inflation to fluctuate around 0,25 percent on month by month basis,’’ he said.
John Mangudya says the central bank should not be blamed for the country’s often unpopular monetary policies but the blame should be directed towards policymakers within government corridors.
He said the apex bank was merely an adviser to government and it was unfair to criticise its operations.
“I will tell the role of the central bank; it is to manage money supply in the economy to guard against inflation,” he told the committee.
“The role of the central bank is to advise the Executive and central bank is not the Executive. Ours is to advise the Cabinet. You cannot then blame me the messenger for relaying the message or to say the messenger has failed.”
Dr Mangudya said the challenges that the economy went through last year were designed to ensure the economy started to turn around.