- Decision
- Maintain
- Rate change
- 0 bps
- policy rate
- 35%
The Reserve Bank of Zimbabwe’s Monetary Policy Committee kept the bank policy rate at 35% in June 2025, saying positive domestic macroeconomic developments and the need to sustain price and exchange-rate stability warranted staying the course, while projecting the economy to grow 6% in 2025 despite an uncertain external environment. The central bank also left statutory reserve requirements unchanged and said tighter liquidity management would continue through recalibrated open market operations, with excess balances absorbed via 30-day Non-Negotiable Certificates of Deposit and early terminations restricted to government tax pay-overs and purchases of foreign exchange from the Reserve Bank. It said monthly ZiG inflation remained below 1% and annual inflation rose to 92.1% in May because of base effects from the September 2024 once-off exchange-rate depreciation, but is expected to decline in the last quarter and end 2025 below 30%; it also pointed to wider use of ZiG in transactions and the supplementary liquidity support provided by the Targeted Finance Facility. On the external side, the Willing-Buyer Willing-Seller foreign exchange interbank market continued to deepen, bona fide demand was being met, the parallel-market premium was stable at around 20%, and foreign-currency reserves fully covered ZiG reserve money and local-currency deposits. The MPC said escalating trade tensions, geo-economic fragmentation, conflicts and policy uncertainty had weakened the global growth outlook, although easing global inflation should lower imported inflation, and it advised the Reserve Bank to maintain a sufficiently tight stance while keeping the market informed of any policy refinements as risks evolve.
Rate evolution
The Reserve Bank of Zimbabwe held the Bank policy rate at 35% from June 2025 through March 2026 before cutting it by 500 basis points to 30% in June 2026, leaving the rate 500 basis points lower over the period. The prolonged hold sought to entrench price and exchange rate stability, anchor inflation expectations and allow tight monetary conditions to transmit, as monthly inflation remained low, annual inflation fell into single digits, foreign currency inflows and reserves strengthened, and growth stayed robust despite uncertainty over global growth, trade tensions and geopolitical conflict. By March 2026, risk framing had shifted toward the oil-price shock and possible second-round effects on expectations, prompting continued restraint even though the Reserve Bank viewed the shock as supply-side and expected inflation to remain in single digits. In June, after inflation stayed below 5%, oil-price pass-through proved limited, expectations remained anchored, reserves rose and the exchange rate remained stable, the Committee cut the rate to support 5% projected growth but called the move a realignment rather than easing, while signalling meeting-by-meeting calibration and vigilance toward emerging risks.