By Nicolas Bariyo
Zimbabwe’s central bank has raised its policy rate from 80% to 200%, citing mounting inflationary pressures amid rising food and fuel prices, Central Bank Governor John P. Mangudya said on Monday. .
“to improve the circulation of currencies.”
“[Inflation] if left unchecked, it would undo the significant economic gains made over the past two years,” Mangudya said. The central bank also “decided to introduce gold coins to the market as an instrument for investors to store value.” he said.
Like many other countries, Zimbabwe is facing rising food and fuel prices, due to fallout from the Russian invasion of Ukraine and pandemic-related disruptions.
Zimbabwe’s local currency has lost more than 90% of its value against the dollar since March, prompting authorities to reintroduce the use of the US dollar as legal tender.
Soaring inflation has seen the prices of staples, such as corn and bread, triple in recent weeks. This has raised fears of unrest in what was once southern Africa’s food basket.
Write to Nicholas Bariyo at [email protected]