Published: 10 July 2019

Zimbabwe won't hesitate to raise interest rates above their current level of 50 percent to deal with speculative borrowers, Finance Minister Mthuli Ncube said on Monday.

As inflation soared, the government hiked the overnight interest rate to 50 percent last month after making its interim RTGS currency the country's sole legal tender.

RBZ governor John Mangudya told a meeting with local businesses in Harare on Monday that Zimbabwean individuals and companies held around $1 billion in foreign-currency accounts, around three months' import cover.

Ncube said the central bank wouldn't hesitate to raise rates again to deal with people speculating on the value of the local currency.

The Zimbabwe dollar was trading at 8.86 to the greenback on the official interbank market, bringing its total losses to 27 percent since June 24 when the government ended dollarisation. On the black market the unit was trading at 10.5 to the dollar.

Mangudya said Zimbabwean individuals and companies held around $1 billion in foreign-currency accounts, around three months' import cover.

Patrick Chivaura, acting CEO of state power utility ZESA Holdings, told the same meeting that the end of dollarisation was hurting its ability to deliver power because mines could no longer pay it in U.S. dollars.

ZESA needs $14 million for monthly electricity imports from the regional power market, Chivaura added.

- Reuters

You might also want to read this

• Mthuli Ncube cut his nose to spite his face
• Mthuli Ncube to pull a few tricks to stabilise the exchange rate
• Mthuli Ncube taken to court over inflation figures
• Nkosinathi Ncube's good job - OneMoney grows 97%
• Mthuli Ncube tables ambitious revenue collection figures
• Mthuli Ncube speaks on approximate exchange rate
• Mthuli Ncube promises to reduce tax burden
• Mthuli Ncube, spare us those hikes
• Masiyiwa 'former' lawyer's multi-currency regime challenge ruled not urgent