To keep inflation in check, the govt of Zimbabwe has been urged to restrain money supply growth and restore financial confidence in the economy, The Chronicle reports. This according to the publication, would curb income erosion. This was said by economist, Brains Muchwmwa who was addressing delegates at the Employers’ Confederation of Zimbabwe annual congress in Bulawayo. Muchemwa said:
The most important intervention mechanism for Government is to restrain money supply growth in order to protect labour earnings and corporate balance sheets.
An environment that is characterised by wild movements in exchange rates and consumer prices is not progressive and does not promote productivity and investment,
Since 24 June when the Zim Dollar was reintroduced, it has been slowly losing value eroding people’s wages and earning in the process. ZCTU’s Japhet Moyo has reportedly appealed to the government to influence the drafting of regulations that determine formulae for salary reviews in line with inflation adjustments. Inflation in August almost reached 300% according to the IMF.
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