Zimbabwe’s monthly consumer inflation fell to 0.5% in February 2025, down from 10.5% in January. Price growth has declined for food and non-food items. The central bank maintained the interest rate at 35% for the second time, while the ZiG’s use in transactions remains limited compared to US dollars. Companies are now required to report in ZiG for their financial statements.
In February 2025, Zimbabwe recorded a significant decline in monthly consumer inflation, falling to 0.5%, the lowest level in seven months. This drop represents a dramatic decrease from January’s inflation rate of 10.5%. The deceleration in price growth affected both food and non-food items, with food inflation reduced to 0.8% from 6.8%, while non-food inflation dropped to 0.3% from 4.6%.
On February 6, the Reserve Bank of Zimbabwe maintained its benchmark interest rate at 35%, a decision made for the second consecutive time, demonstrating a steadfast commitment to a stringent monetary policy aimed at mitigating market volatility. Despite these stabilization efforts, the Zimbabwean Dollar (ZiG) continues to face challenges, particularly within the informal sector where currency regulations are not strictly enforced.
Currently, the ZiG constitutes 30% of all financial transactions in the country, with the remaining 70% occurring in US dollars. Additionally, Governor John Mushayavanhu issued an order for companies listed on the Zimbabwe Stock Exchange to adopt the ZiG for reporting pending their 2024 audited financial statements, which is effective immediately.
In summary, Zimbabwe has experienced a noteworthy dip in its monthly consumer inflation rate, falling to 0.5% in February 2025. Efforts by the Reserve Bank to sustain a stringent monetary policy are evident, though challenges persist in the informal market regarding the enforcement of currency regulations. Transitioning to the ZiG for corporate reporting may further influence the economy as it adjusts to these reforms.
Original Source: www.tradingview.com
