Zimbabwe’s blended consumer price index increased 175.8% in June from 86.5% in May, says the Zimbabwe National Statistics Agency, whilst prices rose 74.5% during the month, compared to 15.7% in May.
The country adopted the consumer price index as its inflation benchmark back in February, as it is a better reflection of the economic reality due to tracking prices in US and Zimbabwean Dollars.
The US Dollar makes up 75% of all transactions in Zimbabwe’s economy and is a preferred store of value over the volatile local Dollar, Zawya reports.
Within a report ahead of the release, the Confederation of Zimbabwe Industries said it is unlikely the monthly inflation target of between 1% and 3% would be reached in 2023.
“The ability to meet blended inflation targets is now under serious threat,” the association stated.
Inflation has been fuelled by a steep decline in the Zimbabwean Dollar. Since May the central bank has loosened controls on the forex market, but stopped short of free-floating the local Dollar in a bid to end volatility and narrow the gap between the official and black market rate.
Over the past two months, the Zimbabwean Dollar has depreciated 85% on the official market.
The monetary policy committee at the central bank increased the interest rate - the highest in the world – to 150% from 140% earlier this month, three weeks before a meeting to curb inflation, yet has since ruled out additional increases.
“We’ve already hiked rates and there is a limit to hiking rates,” said Governor John Mangudya last week.
The recent moves by the Reserve Bank of Zimbabwe are part of a series of measures undertaken by authorities to stabilise the local Dollar. These include President Emmerson Mnangagwa’s prohibition on the bank borrowing foreign currency without the Treasury’s prior approval.
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posted on 05.12.2023
Zimbabwe Dollar falls to record low ahead of currency announcement
The Zimbabwean currency has fallen to another all-time low as residents sought refuge in the stability of the US dollar amid speculation the central bank is on the verge of making an announcement regarding the future of the local currency.
posted on 03.04.2024
RBZ urges govt incentives on diaspora investments
Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ), called on the government on Monday to provide fiscal and non-fiscal incentives to diaspora investments due to their massive contribution to total foreign currency inflows in the country.
posted on 05.12.2023
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