The
Southern
African
country’s
interest
rate
is
now
at
35%
after
the
monetary
policy
committee
voted
to
keep
the
same
borrowing
rates
during
its
final
meeting
of
the
year.
Bloomberg
reports
that
this
would
make
it
the
highest
interest
rate
on
the
African
continent.
“To
ensure
that
inflation
expectations
remain
well
anchored,
the
MPC
resolved
to
maintain
the
current
tight
monetary
policy
stance,”
John
Mushayavanhu,
the
governor
of
the
country’s
central
bank
relayed
via
an
email.
Bloomberg report
also
highlights
the
fact
that
the
hardline
approach
of
the
Reserve
Bank
of
Zimbabwe
has
boosted
the
country’s
bullion-backed
currency
and
aided
it
in
regaining
some
value
against
the
US
dollar.
Zimbabwe
ZiG
This
was
done
to
help
stabilize
the
economy
and
protect
citizens
from
currency
fluctuations
and
sky-high
inflations.
new
gold-backed
currency
ZiG
to
replace
its
dollar
in
April
The
new
currency
was
introduced
by
the
Central
Bank
Governor,
John
Mushayavanhu,
after
the
Zimbabwean
dollar,
the
RTGS,
lost
three-quarters
of
its
value
in
the
four
months
leading
to
April.
The
ZiG
(Zimbabwe
Gold)
rose
12.7%
versus
the
US
dollar
in
November,
its
greatest
month
since
a
stunning
devaluation
on
September
27
wiped
out
nearly
43%
of
its
value.
The
devaluation
in
September
had
triggered
double-digit
monthly
inflation,
a
decline
in
government
income,
and
a
cut
in
worker
pay,
for
the
first
time
since
the
currency’s
launch
in
April.
It
increased
to
37.2%
in
October
after
averaging
over
8%
over
the
previous
seven
months.
“The
spike
in
month-on-month
inflation
in
October
reflected
the
once-off
depreciation
of
ZiG
against
the
US
dollar
in
September
2024,”
said
Mushayavanhu.
The
country’s
fiscal
authorities
anticipate
monthly
inflation
to
average
less
than
3%
in
the
year
to
come,
according
to
assertions
made
last
month
by
Finance
Minister
Mthuli
Ncube.
Oxford
Economics,
however,
stated
that
the
prediction
is
excessively
optimistic.
“Zimbabwe’s
limited
foreign
exchange
reserves,
lack
of
access
to
external
markets,
and
its
tendency
to
rely
on
central
bank
financing
to
fund
fiscal
gaps
will
likely
continue
to
place
pressure
on
inflation
and
the
currency
in
the
medium
term,”
Lyle
Begbie,
an
economist
with
Oxford
wrote
in
a
recent
client
note.
In
November,
the
government
of
the
Southern
African
country opted
to
cut
down
spending
on
its
budget
in
response
to
its
currency
devaluation.
They
decided
that
non-wage
budget
support
will
be
revised,
following
the
Treasury’s
request
to
government
departments
regarding
their
spending
commitments
for
the
remainder
of
the
year.
Some
of
the
initiatives
being
considered
entail
reducing
the
cost
of
running
its
government
including
a
50%
reduction
in
overseas
travel
and
fuel
allocations,
as
well
as
putting
off
local
workshops.