By John Ikani
Zimbabwe’s central bank raised its key interest rate to a record 80-percent from 60-percent, in order to halt a decline in the value of its currency.
The latest rate hike also comes as the country has been facing surging inflation amid food and fuel price pressures due to the war in Ukraine.
According to Bloomberg, the rate is the country’s highest since September 2019 when the bank set it at 70 percent.
It also the world’s highest, after Venezuela and Argentina, according to various statistical sources.
Since the previous hike, the Zimbabwean dollar has lost nearly two-thirds of its value against the greenback, with annual inflation reaching over 72-percent.
The Reserve Bank of Zimbabwe said it had “noted that global inflation was on the increase as a consequence of the on-going Russia-Ukraine conflict which had secondary pass-through effects on domestic and international prices”.
It said global rising prices of oil, gas and fertilisers had “inevitably had a negative impact on domestic costs of production and was destabilising the foreign exchange market”.
