Zimbabwe’s central bank has maintained its monetary policy rate at 35% amidst rising inflation, which was notably affected by spikes in food and housing prices. The gold-backed currency, introduced last year, continues to face devaluation issues, trading at 26.4 per U.S. dollar recently.

The Reserve Bank of Zimbabwe has decided to maintain its monetary policy rate at 35%, emphasizing stability amidst rising inflation driven by increased food and housing prices. In January, inflation surged significantly in both U.S. dollar and local currency, reflecting economic pressures. Since the introduction of a gold-backed currency in April last year, the Zimbabwe Gold (ZiG) has experienced a notable devaluation, worsening after its release at about 13.6 to the dollar and trading at approximately 26.4 per dollar as of Thursday.

Zimbabwe has been grappling with severe economic challenges, notably hyperinflation and currency instability. The country’s introduction of a gold-backed currency aimed to stabilize the financial environment but faced setbacks due to rapid devaluation. The influences of food and housing prices are key factors contributing to ongoing inflationary trends, which prompt the central bank’s monetary policy decisions to mitigate economic pressures.

The decision to keep the monetary policy rate fixed at 35% reflects the central bank’s efforts to manage inflation following significant economic fluctuations in Zimbabwe. While the launch of the ZiG aimed to strengthen the economy, the resultant devaluation signals ongoing challenges. Continual monitoring of inflation trends and currency stability will be crucial for future economic policies.

Original Source: money.usnews.com