Zimbabwe Base Interest Rate Soars Endlessly... 80% → 190% Increase Expected

More than Double from the Previous 80%
Annual Inflation Rate Expected to Approach 160% This Year

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kim Hyunjung] Zimbabwe, which has the highest interest rates in the world, is raising its benchmark interest rate to 190% to combat hyperinflation.

On the 26th (local time), Bloomberg News cited statements from MPC member Ganyanya of the Reserve Bank of Zimbabwe, reporting this development. The news agency stated, "The central bank plans to more than double the already world’s highest benchmark interest rate to 190% to curb inflation," adding, "This is to maintain a positive real interest rate to suppress speculative borrowing that weakens the local currency."

This statement came after Zimbabwe’s annual inflation rate for June was reported to have risen to 191.6% on the 25th, during a phone interview between Bloomberg News and the monetary policy committee member. The government is expected to officially announce detailed plans soon. Previously, President Emerson Mnangagwa had stated that the government would soon reveal measures to curb inflation, including the rising prices of basic necessities.

Earlier, on the 17th, the Reserve Bank of Zimbabwe raised the official benchmark interest rate to 80%, and from July 1, loans will not be granted below this benchmark rate. However, the committee member mentioned that interest rates may be lowered for the agricultural sector to protect agricultural production.

Zimbabwe’s inflation forecast was initially between 25% and 35%, but was recently revised upward to 160%. Committee member Ganyanya explained, "If external shocks are factored in, it will remain above 100%." The central bank also downgraded its economic growth forecast from 5.5% to 3.5%.

The government is not controlling product prices for basic necessities or private manufacturers. Committee member Ganyanya explained, "Our economy is market-driven, and past attempts at price controls did not work."

This content was produced with the assistance of AI translation services.