(Bloomberg) -- Zimbabwe raised interest rates and devalued its gold-backed currency by 43%, following persistent weakness in the ZiG amid deep skepticism the nation’s latest bid to create a viable local unit would succeed.

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The Reserve Bank of Zimbabwe lifted the benchmark policy rate to 35% from 20%, it said in a statement on Friday. Prices on its website separately showed the ZiG, short for Zimbabwe Gold, quoted at 24.4 per dollar from 14 per dollar earlier in the day.

The central bank did not explicitly confirm it was devaluing the ZiG. But Governor John Mushayavanhu said in the statement that to combat inflation it was taking steps, including allowing “greater exchange rate flexibility, in line with the increased demand for foreign currency in the country.”

--With assistance from Ana Monteiro.

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