Tight monetary policy leads to price stability

Source: Tight monetary policy leads to price stability – herald

Debra Matabvu

THE various monetary policy measures introduced by the Government over the past few months have contained inflation, enhanced currency and price stability and the general availability of goods, Information, Publicity and Broadcasting Services Minister Dr Jenfan Muswere has said.

Addressing  a post-Cabinet media briefing in Harare yesterday, Dr Muswere said a survey conducted by the Ministry of Industry and Commerce between January and March this year revealed relative price stability across 14 basic commodities.

During the period under review, the gap between the official and parallel markets had narrowed significantly.

“Cabinet considered an update on price movements and the availability of basic commodities in the domestic market for the period January 2025 to March 2025,” said Dr Muswere.

“The Ministry of Industry and Commerce conducts routine surveys to monitor prices and the availability of basic commodities with the ultimate goal of safeguarding and promoting consumer welfare in the economy.

“The surveys target 14 basic commodities namely: mealie-meal, laundry soap, cooking oil, bread, sugar, flour, rice, bath soap, washing powder, powdered/fresh milk, eggs, beef, chicken  and salt.

“The public is advised that there is a positive correlation between the movements in the prices of basic commodities and exchange rate movements.”

He said the gap between the official and parallel market rates had narrowed between January and March.

Dr Muswere said the survey also revealed that local products continue to dominate shelf space in the formal and informal sector outlets.

Cabinet also noted that between January and March 2025, some viability challenges were faced by wholesale and retail outlets.

The Ministry of Industry and Commerce conducted compliance inspections on formal and informal retail outlets, with over 100 prosecutions done and 3 000 units seized.

“The period under review witnessed the wholesale and retail sectors facing significant viability challenges resulting in branch closures, destocking and reduced operations by some of the retail outlets,” said Dr Muswere.

“Compliance inspections undertaken by the ministry have resulted in 137 prosecutions, issuance of 245 compliance notices and the seizure of 3 427 units of different products.

“The current tight Monetary Policy is yielding results in the containment of inflationary pressures and maintaining exchange rate and price stability.”

Recently, monetary authorities said they were committed to the long-term stability of the ZiG, and effectively liberalised the pricing system, allowing companies to adopt exchange rates that reflect market dynamics.

Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mushayavanhu, told delegates at a tourism conference that the market “is free to price their goods and services at whatever USD to ZiG rate they prefer without being limited to using the official RBZ exchange rate”.