The country's exporters, mainly miners and tobacco farmers, have protested that the skewed exchange rate has devastated their businesses.

 

Zimbabwe has been crippled by foreign currency and fuel shortages, unemployment of over 80 per cent and the highest rate of inflation in the world.

   

"Year-on-year inflation, which stood at 1,072.2 per cent in October last year, rose to 1,281.1 in December and has risen to 2,200 percent by March," Gono said in a televised statement.

   

"Both food and non-food inflation contributed to the inflation spiral."

   

The rate of increase in February was 1,729.9 per cent.

   

Gono made his interim monetary policy statement two months ahead of schedule in an attempt to tackle the crisis, widely blamed on policies by Robert Mugabe, Zimbabwe's president.

   

Since the start of this year, the government has responded to a series of strikes and political protests with a violent crackdown on political opponents.

 

Gono said the overnight secured interest rate would rise to 600 per cent from 500 per cent previously while the unsecured rate would rise to 700 per cent from 600 per cent.

   

When asked about the exchange rate, he said: "There is not going to be an exchange rate movement from 250 to the US dollar. There is no devaluation."

   

The March inflation data had been due for release earlier this month, but Zimbabwe's state statistics agency delayed publication, saying it was still working on the figures.