The Zimbabwe central bank held the benchmark interest rate at 150% for the second consecutive meeting on Thursday, according to Governor John Mangudya.

The bank maintained the world’s highest borrowing costs at the first meeting since the re-election of Emmerson Mnangagwa as president last month.

“The MPC (monetary policy committee) noted with satisfaction the sustained decline in month-on-month inflation. The MPC affirmed its strong commitment to maintaining the current tight monetary policy stance and to take all necessary action to firmly anchor inflation and exchange rate expectations,” the governor stated.

The pause in the rate hiking cycle follows on from rate holds last week in emerging markets, including the Philippines, Indonesia, Egypt, Taiwan and South Africa, as policymakers were cautious following the Federal Reserve’s meeting, Bloomberg reports.

The Fed kept its benchmark rate unchanged but indicated borrowing costs would likely remain higher for longer following one additional hike this year.

The decision to hold rates was widely expected after the Treasury signalled earlier in September it plans to maintain its tight monetary policy stance to boost economic stability and provide support for the Zimbabwean dollar. 

The local Dollar fell around 85% against the greenback between May and June, resulting in inflation surging. The government subsequently intervened by liberalising the exchange rate and implementing measures to promote the use of the Zimbabwean Dollar, such as the obligation to pay corporate taxes in the local currency.

In addition, annual inflation in the country decelerated to 18.4% in September from 77% the previous month as the statistics office revised its procedure to consider the US Dollar’s role in the economy, the Bloomberg report adds.

By the end of the year, the central bank is targeting price growth of between 60% and 70%.