Zimbabwe's monthly inflation rate has reached its highest point since the introduction of the bullion-backed currency.
Consumer prices in the country increased by 1.4% in August, a significant shift from the 0.1% decline recorded in the previous month, according to the Zimbabwe National Statistics Agency in an online briefing on Monday.
The inflation spike was primarily driven by rising costs of food and non-alcoholic beverages, the agency reported.
In May, Zimbabwe began calculating inflation using its new currency, the ZiG (Zimbabwe Gold), which was introduced on 5th April to replace the Zimbabwean Dollar, Bloomberg reports.
The previous currency had collapsed multiple times since its reintroduction in 2019, fuelling inflation.
This marks the southern African nation’s sixth attempt in 15 years to establish a stable local currency.
Although the recent stability of the ZiG against the Dollar has helped curb inflation, a severe drought has driven up food prices, a trend expected to persist until the next harvest in March.
Zimbabwe is currently grappling with food shortages and requires up to $400 million to secure 290,000 tons of corn, the country's staple food, according to the United Nations’ World Food Programme.
To supplement food supplies, Zimbabwe’s government and private millers are importing grain, a strategy that carries the downside risk of putting pressure on the exchange rate, according to Governor John Mushayavanhu.
As of Monday, the ZiG had depreciated by 0.2% against the Dollar this month, reaching a record low of 13.82.
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