Zimbabwe beaten! Argentina has the record of the highest interest rate in the world
The value of the interest rate that governs a country is linked to inflation, at least normally and except for some political exceptions. Central banks use it to expand or slow the economy and as a way to contain rising prices. Zimbabwe is the country with the highest inflation in the world (340% year-on-year in September) and until this week also held the dubious distinction of also having the highest rate in the world (150%), but has now lost this record.
Since Tuesday, the African country's Central Bank has cut the rate from 150 to 130% as a way to boost economic growth. It thus lost that unenviable position at the hands of Argentina, which had taken it from 118% to 133% on October 12, the same day that September inflation was known to be 12.7%. Here are the relevant graphs. Argentina:
And Zimbabwe
In fact, post-dollarisation, inflation in Zimbabwe is falling
The government liberalized the exchange rate and introduced measures to promote the use of the Zimbabwe dollar, such as requiring corporate taxes to be paid in that currency, which helped stabilize it and restore some price stability. Zimbabwe basically gave up its own currency, but there wasn't much else it could do. It will take a few years to get things right.
In Argentina, inflation is following the opposite path: it went from 6% in June and 6.3% in July, to 12.4% in August and 12.7% in September. and this on a monthly basis….
On an annual basis the figures are very different…
Now Massa, from the same party that caused this crisis, is ready to become the next president, probably beating the liberal Milei. So there is no way out of astronomical inflation anytime soon in Argentina.
How the ranking is completed
Behind Argentina and Zimbabwe, the country that has the highest rate is Venezuela, but with 55%, less than half of Argentina.
Followed by Ghana, which drops to 30%, Turkey, Pakistan, Lebanon, Ukraine, Egypt, Nigeria, Mozambique, Angola, Kazakhstan, Uzbekistan and Colombia, which has a rate of around 13%.
On the other side of the table, Japan not only has the lowest rate but it is negative, at 0.10%. This is followed by Fiji (0.25%), Switzerland (1.75%), Taiwan, Belize, Croatia, Thailand and Albania. The eurozone has a rate of 4.5% and the United States has a rate of 5.25%.
Thanks to our Telegram channel you can stay updated on the publication of new Economic Scenarios articles.
The article Zimbabwe beaten! Argentina has the record of the highest interest rate in the world comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/battuto-lo-zimbabwe-largentina-ha-il-record-del-piu-alto-tasso-di-interesse-al-mondo/ on Sat, 28 Oct 2023 09:00:59 +0000.