Reserve Bank of Zimbabwe Governor Dr John Mangudya has complained that the country’s inflation rate is too low and needs to increase if the country is to grow economically. The central bank is looking to increase the amount of bond notes from the $200 million which was initially announced in 2016. The country’s inflation was at 0.75 percent in March while Mangudya would like the inflation to rise to between 3 and 7 percent.
Speaking at a business symposium on Wednesday, Mangudya said:
As central bank governors in the region we have agreed that the range of conversion should be between 3 and 7 percent. If you are below that you can not grow…we are still within the SADC benchmark …in fact we are still below the range which allows you to grow.
Other countries such as Angola and Tanzania have higher rates of inflation but they are still growing….our situation is unique. They can print local currency to finance their deficit but we cannot. Our deficit has to be financed by foreign currency.
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