Zimbabwe holds rates steady at 20 percent in first meeting since ZiG debut

HARARE – Zimbabwe’s central bank kept its benchmark interest rate unchanged at its first policy meeting since unveiling the gold-backed currency, the ZiG.

Governor John Mushayavanhu said in a statement that the monetary policy committee had held the rate at 20 percent after receiving positive market reaction to the new currency.

According to Mushayavanhu, the MPC expects currency reforms to help provide “stability, certainty and predictability in the exchange rate and inflation”.

The MPC also set the interest rate corridor at between 11 percent to 25 percent, Mushayavanhu said.

The southern African nation introduced ZiG, short for Zimbabwe Gold on 5 April.

The currency is backed by 2.5 tons of gold and $100 million in foreign currency reserves held by the central bank. On the same day, the central bank reset interest rates from 130 percent, a world record, to 20 percent.