Africa-Press – Zimbabwe. THE Reserve Bank of Zimbabwe (RBZ) has sounded a warning on the risks associated with exchange rate volatility, emphasising its potential impact on price stability.
RBZ chief economist Edmore Jaya said risks to price stability were primarily driven by cost-side factors and exchange rate fluctuations.
He drew parallels with experiences from other countries, citing Estonia as an example where exchange rate movements had a direct and immediate impact on prices.
“We need to ensure that the exchange rate is stable so as not to disrupt the pricing system,” Jaya said.
He was speaking at the Institute of Administrators and Commerce annual conference and Sixth Procurement and Logistics Conference 2025 in Kariba yesterday.
“Every time the exchange rate moves on the power of marketing, you know that prices instantly digest it, particularly in a tech shop, if you are staying in a lab. That pass-through is almost one-to-one,” he said.
RBZ said it continued to implement monetary policy changes aimed at addressing the country’s economic challenges, particularly inflation and exchange rate volatility.
The central bank has introduced measures such as increasing the bank policy rate to 35% and raising statutory reserves to reduce liquidity and stabilise prices.
Additionally, RBZ has liberalised the exchange rate, allowing for greater flexibility in its management.
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