In February 2025, Zimbabwe’s monthly consumer inflation decreased to 0.5%, down from 10.5% in January. Price growth for food and non-food items also slowed significantly. The central bank upheld its 35% benchmark interest rate to control market volatility, although challenges in the informal economy and the adoption of the ZiG remain critical issues.
Zimbabwe’s monthly consumer inflation fell to 0.5% in February 2025, the lowest figure observed in seven months, a significant decrease from January’s 10.5%. This reduction in inflation reflects a slowdown in price growth for food, which was recorded at 0.8% compared to January’s 6.8%, as well as non-food items at 0.3%, down from 4.6%.
On February 6, the central bank maintained its benchmark interest rate at 35% for the second consecutive month, emphasizing its commitment to a stringent monetary policy aimed at mitigating market volatility. However, despite these stabilization efforts, the Zimbabwean Dollar (ZiG) continues to struggle against challenges, especially within the informal market where currency regulations are not strictly enforced.
Currently, the ZiG facilitates around 30% of all transactions, while the remainder is conducted in US dollars. In a recent development, Governor John Mushayavanhu mandated that all companies listed on the exchange must adopt the ZiG for reporting purposes, effective immediately, including its use in their audited financial statements for 2024.
In summary, Zimbabwe has experienced a notable decrease in consumer inflation, achieving its lowest monthly inflation rate in seven months at 0.5% for February 2025. Central bank policies remain focused on maintaining high interest rates to stabilize the economy, though challenges persist with currency regulations in the informal market. The mandate from the governor to adopt the ZiG for financial reporting represents a significant policy shift.
Original Source: www.tradingview.com
