Zimbabwe hikes bank rate by 800%

Zimbabwe hikes bank rate by 800%

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By Staff Reporter

ZIMBABWE'S central bank raised its key accommodation rate to 800 percent from 750 percent effective Tuesday as it battles to curb surging inflation, a source at the central bank said.

The country's annual inflation rate vaulted to a record 913.6 percent in March from 782 percent in February. Zimbabwe has the highest inflation rate in the world and it's once thriving economy is in its eighth year of recession.

"The accommodation rate as been raised to 800 percent," the source who declined to be named told Reuters.

Dealers said it was not clear whether commercial banks would follow suit given that many were not lending money to individuals anyway.

Prime lending rate rates are officially around 600 percent -- below the bank rate -- due to what dealers said were political pressures.

Soaring inflation has dashed hopes of revival for the economy mired in escalating poverty and shortages of foreign currency and fuel.

The central bank, tasked with turning around the economy's fortunes, had previously forecasts that inflation would peak at between 700 and 800 percent during March before falling to between 220 and 230 percent by the end of the year.

Critics blame President Robert Mugabe's government for the economic meltdown.

But the government attributes the country's woes to sabotage by the West, led by former colonial power Britain in retaliation for its controversial seizures of land from white commercial farmers - Reuters
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