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

Bloomberg

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% 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”.

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The MPC also set the interest rate corridor at between 11% to 25%, 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%, a world record, to 20%.