September 11, 2019 / 12:42 PM / 5 days ago

Zimbabwe sets up monetary policy committee to boost confidence

HARARE (Reuters) - Zimbabwe has appointed a monetary policy committee (MPC) at its central bank as part of a set of reforms aimed at removing economic distortions and boosting confidence in policymaking, the finance ministry said.

The nine-member MPC includes central bank governor John Mangudya, two deputy governors, university professor Ashok Chakravarti and former opposition politician Eddie Cross.

Its appointment, which came into force on Tuesday, comes as Zimbabwe is in an economic crisis, with triple-digit inflation, daily power cuts and a severe drought piling pressure on President Emmerson Mnangagwa’s government.

Steps taken this year towards relaunching the Zimbabwean dollar after a decade of dollarisation have increased people’s hardships, but financial policymakers insist they are necessary to lay the foundations for future growth.

“The appointment of the monetary policy committee will ensure broader consultation about interest rates,” senior finance ministry official George Guvamatanga told Reuters.

The MPC’s mandate is expected to include ensuring price stability and determining the limits for the Reserve Bank of Zimbabwe’s open market operations, Guvamatanga said.

It is not yet clear when the MPC will meet for the first time. In June, the central bank hiked the interest rate on its overnight window to 50% to buttress the interim RTGS currency.

Reporting by Alexander Winning; Editing by Steve Orlofsky

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