In February 2025, Zimbabwe’s monthly inflation dropped to 0.5%, marking a significant decrease from January’s 10.5%. Both food and non-food price growth slowed considerably. The central bank held its interest rate steady at 35%, aiming to curb market volatility, though challenges remain in the informal sector where compliance is weak. Companies are now required to use the ZiG for financial reporting.
In February 2025, Zimbabwe’s monthly consumer inflation saw a significant decline, dropping to 0.5%, the lowest rate in seven months, compared to January’s rate of 10.5%. This reduction indicates a noticeable slowdown in price growth, particularly evident in both food and non-food categories, with food inflation decreasing to 0.8% from 6.8% and non-food inflation to 0.3% from 4.6%.
On February 6, the Reserve Bank of Zimbabwe maintained its benchmark interest rate at 35% for the second consecutive meeting, thereby asserting its commitment to a stringent monetary policy aimed at reducing market volatility. Notwithstanding these stabilization efforts, the ZiG continues to encounter challenges, especially within the informal market where regulatory enforcement remains lax.
Currently, the ZiG accounts for approximately 30% of all financial transactions in Zimbabwe, with the remainder being conducted in US dollars. Earlier this month, the governor of the central bank, John Mushayavanhu, mandated that companies listed on the exchange utilize the ZiG for all reporting purposes, effective immediately, including in their financial statements for 2024.
In summary, Zimbabwe’s inflation has significantly decreased, reflecting more stable economic conditions in February. However, challenges persist, particularly in enforcing currency regulations within the informal market. The central bank’s decision to maintain interest rates demonstrates a commitment to stabilize the economy amidst these issues, further highlighting the importance of adapting to the changing financial landscape.
Original Source: www.tradingview.com
