In February 2025, Zimbabwe’s monthly inflation fell to 0.5%, down from 10.5% in January. Price growth decelerated for both food (0.8%) and non-food items (0.3%). The central bank held the interest rate steady at 35% for the second month, emphasizing a strong policy stance. The ZiG accounts for only 30% of transactions, with companies required to use it for reporting purposes going forward.
In February 2025, Zimbabwe’s monthly consumer inflation for the local currency, the ZiG, experienced a significant decline, falling to 0.5%, the lowest recorded in seven months. This represents a notable decrease from January’s inflation rate of 10.5%. The slowdown in price growth reflects a decrease in both food, which saw an inflation rate of 0.8% compared to 6.8% in January, and non-food items, which dropped to 0.3% from 4.6%.
The Reserve Bank of Zimbabwe maintained its benchmark interest rate at 35% for the second consecutive month, reinforcing its strategy to maintain a stringent monetary policy aimed at stabilizing the economy and mitigating market volatility. These efforts to control inflation coincide with ongoing challenges in the market, particularly within the informal sector, where regulations over the currency are less strictly upheld.
Currently, the ZiG comprises 30% of all transactions within the country, while the remainder is conducted in US dollars. Furthermore, Governor John Mushayavanhu has mandated that all companies listed on the exchange utilize the ZiG for their reporting purposes immediately, including in their audited financial statements for the year 2024.
In summary, February 2025 saw a remarkable reduction in Zimbabwe’s inflation rate, reflecting successful stabilization efforts by the government amid ongoing challenges, particularly in the informal sector. The decision to maintain a high benchmark interest rate highlights the central bank’s commitment to a firm economic policy. The directive for listed companies to use the ZiG in financial reporting signifies a push towards greater adoption of the local currency in economic transactions.
Original Source: www.tradingview.com
