Zimbabwe’s 200% Interest Rate Policy Choking Economic Growth

Analysts said yesterday that the current high-interest rates were choking economic growth By Tawanda Karombo Maintaining interest rates at 200% - the highest in the world - will stifle economic growth for Zimbabwe, as it battles monetary instability despite retailers and manufacturers starting to record a surge in US Dollar sales amid a local currency crunch. Finance Minister Mthuli Ncube said over the weekend that Zimbabwe would maintain interest rates at 200 percent for the next three months as a way of stabilising inflation. The government was inclined to maintain the current tight monetary, interest rate and fiscal policy regime. “That's what it takes to bring stability and bring things under control," he said. The Zimbabwe dollar local unit of exchange, which has been highly volatile, has notched up some stability on the parallel exchange rate market. It has been trading at around $1:ZWL700 in the past few weeks. However, analysts said yesterday that the current high-interest rates were choking economic growth.