Zimbabwe highest rates may rise further, governor says

Bloomberg/Godfrey Marawanyika and Ray Ndlovu/2-17-2022

“‘If we see inflation going up in February and in March, brace up for very high interest rates,’ Reserve Bank of Zimbabwe Governor John Mangudya told business leaders Thursday in the capital, Harare. He didn’t provide details on how much further the bank is prepared to raise rates.”

USAGOLD note: This article caught our eye in that too many in the financial media equate raising rates with a hawkish monetary policy, when it is only half the equation. In Zimbabwe, the overnight lending rate is 60%. Inflation is running at 60.7%, if current government data is to be believed, and it was as high as 322% just a year ago. So it is fairly evident that raising rates in Zimbabwe in and of itself has not kept a lid on the inflation rate. Meanwhile, Bloomberg reports, the Zimbabwe dollar trades at 230 to the U.S. dollar in the real market – almost double the official rate of 120 per U.S. dollar.