Zim to keep world's highest interest rates

Zimbabwe will keep the world&#039;s highest benchmark interest rate of 200% into next year as it prioritises economic stability ahead of high growth rates, Finance Minister Mthuli Ncube said."I think once we see that downtrend in month-on-month inflation being sustainable, maybe over a three- to four-month period, then we can begin to think about lowering interest rates," Ncube said. "But for now, the tough monetary regime stance and the tough fiscal stance also stand. That&#039;s what it takes to bring stability and bring things under control."The southern African nation hiked interest rates to 200% in June to help rein in inflation and support a local currency that has lost more than 80% of its value against the US dollar this year. The tight monetary stance has resulted in a shortage of Zimbabwe dollars on the parallel market, enabling the convergence of the official and unofficial exchange rates.On an annual basis, consumer prices surged 280% in September, according to the national statistics agency. Authorities are targeting a monthly inflation rate of 3%, although the desirable target is 1% and may be hard to achieve, Ncube told reporters Saturday at a virtual press briefing in Washington. Consumer prices rose 3.5% in September from a month earlier.Ncube said authorities now had to "sacrifice" growth that he had earlier forecast at 4.6% for this year, compared with a 5.5% forecast in November. The International Monetary Fund cut Zimbabwe&#039;s growth outlook to 3% from 3.5%.A Zimbabwean dollar trades at Z$628 per US dollar, according to the central bank&#039;s website.-Fin24

Zim to keep world's highest interest rates

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