The Reserve Bank of Zimbabwe has cut its policy rate to 27.5% from 30%, saying inflation is now firmly anchored despite a spike in global oil prices.

Governor John Mushayavanhu said annual ZiG inflation fell to 2.9% in August, its lowest since 1980, before edging up to 3.7% in September.

“The increase largely reflected the renewed rise in international oil prices, which exceeded US$100 per barrel on 9 September, amid the escalating conflict in the Middle East,” he said.

The MPC said reserve money remained within IMF targets under its 10-month Staff-Monitored Programme, with all targets met.

Inflation is expected to stay below 7% by year-end while strong exports cushioned the oil shock.

Foreign inflows rose 37.8% to US$14.3 billion to August, pushing the current account surplus to US$1.1 billion in H1 2026 from US$248m a year ago.

Reserves backing the ZiG now exceed US$2 billion, keeping the ZiG at 25-27 per US dollar.

The Bank also cut its Targeted Finance Facility to 12.5% and capped lending to productive sectors at 22.5%.

Mushayavanhu stressed the cut “does not signal monetary easing, but a realignment of the policy rate to the observed inflation dynamics.

“Growth is still seen at 5% in 2026, but the MPC warned it is monitoring “heightened global tensions and the forecast El Niño conditions.”