Harare (New Ziana) –The Zimbabwean economy has remained resilient despite disruptions to global supply chains caused by the escalating conflict in the Middle East, with growth projected at five percent this year, supported by strong foreign currency inflows, stable inflation and a firm exchange rate environment, the central bank has said.
Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu said this in a statement announcing resolutions from the Monetary Policy Committee (MPC) meeting held in Harare on Monday.
He said prudent monetary policy measures had enabled the country to withstand external shocks, including recent oil price increases linked to geopolitical tensions in the Middle East.
“Despite the disruptions to global supply chain logistics due to the Middle East conflict, the domestic economy has remained resilient and is expected to grow by five percent in 2026,” he said.
Mushayavanhu said the macroeconomic stability in the country had been reinforced by robust foreign currency inflows, which reached US$8.3 billion as at May 31, compared to US$6 billion during the same period last year.
“The robust growth momentum has supported increased foreign currency inflows, resulting in a healthy surplus over foreign payments and contributing to increased foreign currency deposits, stronger reserves and exchange rate stability,” he said.
He said the foreign currency reserves backing the Zimbabwe Gold (ZiG) currency had risen to more than US$1.5 billion by the end of May, equivalent to about one-and-a-half months of import cover.
The accumulation of reserves enabled the central bank to strategically intervene in the foreign exchange market to ensure that legitimate foreign payment requirements were met while maintaining exchange rate stability, he said.
“As a result, the ZiG exchange rate remained stable within the range of ZiG25 to ZiG27 per United States dollar, with subdued parallel market activity,” he said.
Mushayavanhu also noted significant progress in reducing inflation, which has fallen sharply from a peak of 95.8 percent in July last year to below five percent since January this year.
He said the recent oil price shock had only a limited impact on domestic prices, with inflation expectations remaining firmly anchored.
“The observed structural shift in inflation dynamics has helped the country weather the impact of the recent oil price shock, with only moderate adjustments in domestic prices relative to the magnitude of the shock,” he said.
Annual inflation stood at 4.4 percent in May 2026, down from 4.8 percent in April, while month-on-month inflation eased back to 0.5 percent in May after temporarily rising to 1.1 percent in April.
In response to the improved inflation outlook, Mushayavanhu said the MPC resolved to reduce the Bank Policy Rate from 35 percent to 30 percent with immediate effect.
“The decision reflects a realignment of the policy rate to the structural shift in inflation dynamics and should not be construed as an easing of monetary policy,” he said.
Mushayavanhu said the MPC also reduced the interest rate on the Targeted Finance Facility from 20 percent to 15 percent to support productive sectors, while maintaining statutory reserve requirements at current levels.
He welcomed the initial uptake of the newly operationalised ZiG Denominated Term Deposit Facility, which attracted subscriptions of ZiG367.2 million for the 90-day instrument and ZiG110 million for the 30-day facility, which would assist in promoting savings, deepen capital markets and strengthen monetary policy transmission.
The MPC also acknowledged ongoing discussions between Zimbabwe and the International Monetary Fund under the Staff Monitored Program and urged continued adherence to agreed reforms and benchmarks, also highlighting that the RBZ would continue to closely monitor domestic and global developments,” he said.
“The Committee remains vigilant to emerging risks and stands ready to make appropriate policy decisions to support the country’s inflation and growth objectives,” he said.
The Zimbabwean economy is expected to moderate from an estimated growth rate of 8.2 percent last year to 5 percent this year, with authorities banking on macroeconomic stability, mineral exports, agriculture and continued foreign currency inflows to sustain economic momentum amid an uncertain global environment.
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