UPDATE 1-Zimbabwe central bank leaves lending rates unchanged as price-growth slows

Zimbabwe's central bank on Monday left its benchmark lending rate unchanged at 35%, citing moderating inflation, as the regulator looked to introduce more local currency and limit the flood of foreign tender.

Zimbabwe is in the grips of its worst economic crisis in a decade, with prices of basic goods soaring and shortages of medicines, fuel, and electricity, diminishing hopes of a quick recovery under President Emmerson Mnangagwa. The crisis has rekindled protests against the government, with public servants in January threatening to down tools over wages, while broader impatience with the deepening poverty upsetting the fragile calm since the 2017 coup that toppled long-time ruler Robert Mugabe.

Government last year suspended publication of annual inflation data, but economic analysts say the figure reached 525% in December. Governor John Mangudya said he saw annual price-growth dipping below 50% by year-end. Monthly inflation fell sharply in January to 2.23%

"Our task is we stabilize inflation and stabilize the exchange rate. We expect month on month inflation will continue to come down until the end of the year," Mangudya said. "Most of the inflation is caused by non-monetary factors. That is expectations - that 'I lost money in 2008' (to hyperinflation). This is a once beaten twice shy scenario. These are things that shape inflation in Zimbabwe," Mangudya said.

The central bank governor said he still saw economic growth at 3% in 2020, and that the bank planned to introduce more local dollars into circulation to stabilize foreign exchange markets that for years have relied on dollars and the South African rand. The country abandoned its currency after inflation peaking at 500 billion percent in 2008 wiped out pensions, savings and any vestiges of confidence in the local currency.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)