Zimbabwe’s central bank has maintained its monetary policy rate at 35% amidst rising inflation influenced by food and housing prices. The country’s gold-backed currency, launched last year, has seen significant devaluation since its inception.
On Thursday, the Reserve Bank of Zimbabwe confirmed that it will maintain its monetary policy rate at 35%. This decision comes in light of rising inflation rates driven by increasing food and housing prices. The current economic climate in Zimbabwe presents challenges that are influencing the central bank’s policies.
Zimbabwe has been grappling with severe inflation, particularly in January, affecting both the local currency and U.S. dollar transactions. The central bank introduced a gold-backed currency, the Zimbabwe Gold (ZiG), in April of last year, aimed at stabilizing the economy. However, the ZiG faced a drastic devaluation in September, losing value further since then. As of Thursday, it was trading at approximately 26.4 ZiG per U.S. dollar, significantly lower than its initial value of 13.6.
The Zimbabwe central bank’s decision to hold the monetary policy rate steady at 35% reflects ongoing concerns about inflation spurred by essential commodities. The depreciation of the ZiG indicates the struggles within the Zimbabwean economy to stabilize its currency amid rising prices and reflects the central bank’s cautious approach to monetary policy.
Original Source: clubofmozambique.com
