Finance Minister Mthuli Ncube has defended Zimbabwe’s tight monetary policy stance, telling Parliament that maintaining high interest rates remains necessary to safeguard exchange rate stability and sustain low inflation.
Speaking during a parliamentary question-and-answer session on Wednesday, Ncube said the country’s recent macroeconomic stability was the result of coordinated fiscal consolidation and strict monetary measures implemented together with the Reserve Bank of Zimbabwe.
“These are not easy decisions,” Ncube told legislators, emphasising that policymakers were balancing economic growth considerations with the need to protect price stability.
The minister explained that authorities raised the bank policy rate to 35 percent and increased statutory reserve requirements to 30 percent for both local and foreign currency deposits in September 2024. The measures were aimed at reducing excess liquidity, anchoring inflation expectations and limiting speculative activity in financial markets.
According to Ncube, the policy tightening contributed to exchange rate stability beginning in October 2024, while annual inflation declined significantly to 4.1 percent in 2025.
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“We fully acknowledge that the policy rate is high given the current levels of inflation and we understand why that decision was taken in the first place,” he said.
Despite falling inflation, Ncube cautioned against prematurely loosening monetary conditions, warning that early easing could reverse stability gains and trigger renewed inflationary pressures.
He said the Monetary Policy Committee is expected to begin a gradual reduction of the policy rate in line with improving inflation trends, while closely monitoring economic developments.
The minister added that government’s approach seeks to strike a balance between supporting productive sectors and maintaining price stability.
“These are not easy decisions,” Ncube said. “They are tough, but they are necessary. Without stability, there can be no sustainable economic growth.”
He noted that sustained macroeconomic stability would create conditions for economic recovery and enable long-term growth to proceed in a disciplined and orderly manner.
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