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The Reserve Bank of Zimbabwe (RBZ) has forecast that inflation will fall below 5% by December, despite challenges such as a rising import bill and fluctuations in commodity prices.
In October, consumer prices surged by 37.2%, driven largely by a sharp depreciation of the Zimbabwe Gold (ZWG) currency.
However, in an interview with the <a href="https://www.theindependent.co.zw/business-digest/article/200034711/panic-not-inflation-is-under-control-rbz">Zimbabwe Independent</a>, RBZ Deputy Governor Innocent Matshe expressed confidence that inflation will soon stabilise and return to acceptable levels. Said Matshe:
<blockquote>
So really, as an economy, we should not panic because there is this huge jump in inflation.
But what we should do is take lessons from it. Because really, in terms of the aggregate inflation, it has risen to about 7,3% and we projected that by December the inflation rate should be below 5%.
We have a huge import bill of grain because of the El Niño-induced drought. We have had a huge knock given the fall in commodity prices.
We are a commodity exporter. So, we had a huge fall in commodity prices.
</blockquote>
Matshe explained that because the Zimbabwe Gold (ZWG) currency is backed by gold, an increase in gold prices will ultimately help stabilise the currency. He said:
<blockquote>
We are not so far off. We know that there has been an uptick this month (in terms of inflation). There will be moderation next month, but there will be a fall going forward to within the 5% that we projected. So, everything is under control.
Obviously, that will have an impact, but we think that impact (will be) moderate because one of the key commodities in our reserves basket, which is gold, its price is going up.
It is actually approaching record highs if it’s not at record highs already. So, there will be a moderation.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Pindula News

The Reserve Bank of Zimbabwe says inflation will go below 5% by December. The rise in prices in October was mainly because of their currency losing value. The Deputy Governor believes things will improve soon. They have a big bill for importing food because of bad weather. Also, the prices of goods they sell have fallen. But, because their currency is connected to gold, if gold prices go up, their currency will be stable. They predict inflation will drop to 5% soon.

RBZ Projects Inflation To Drop Below 5% By December

The ZWG (ZiG) inflation rate has surged to 37.2% month on month in October, the Zimbabwe National Statistics Agency (ZIMSTAT), announced on Friday.
This rise follows the rapid depreciation of the exchange rate, with the Reserve Bank of Zimbabwe (RBZ) devaluing the ZiG official rate by 43% in September.
Presenting the latest data Friday, ZIMSTAT Prices Statistics Manager, Thomas Chikadaya said:
<blockquote>
The month-on-month inflation rate was 37.2 per cent in October 2024, gaining 31.4 percentage points on the September 2024 rate of 5.8 per cent.
This means that prices as measured by the all-items ZWG CPI, increased by an average of 37.2 percent between September 2024 and October 2024.
</blockquote>
In September, before the devaluation, consumer inflation was at 5.8% month on month in local currency terms.
The year-on-year inflation rate (annual percentage change) for the month of October 2024 as measured by the all-items USD Consumer Price Index (CPI), was 4.1 per cent.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe's money's value went down a lot, so everything got more expensive. The prices went up by 37.2% in October, which is much higher than before. The bank changed the money rate in September, and that made things worse. People in Zimbabwe had to pay a lot more for things compared to the year before. The new data was announced on Friday, and it showed how bad the situation was getting. Everyone in Zimbabwe is struggling because of this inflation.

Zimbabwe Inflation Surges To 37.2% After ZiG Currency Devaluation

Zimbabwe’s month-on-month inflation surged to 5.8% in September 2024, up from 1.4% in August, driven largely by the sharp depreciation of the newly introduced currency, the Zimbabwe Gold (ZiG).
Since its launch in April 2024, the ZiG has faced increasing volatility, exacerbated by a shortage of US dollars in the market.
The Reserve Bank of Zimbabwe (RBZ) has attributed the currency’s decline largely to speculative activities.
This 4.4 percentage point increase in month-on-month inflation marks the most significant rise since the ZiG’s introduction.
According to the Zimbabwe National Statistics Agency (ZIMSTAT), the all-items Consumer Price Index (CPI) rose 5.8% on average between August and September 2024.
ZIMSTAT said the month-on-month inflation rate reflects the percentage change in the price index compared to the previous month.
For September 2024, the weighted CPI for food and non-alcoholic beverages was the primary contributor to this increase, accounting for 1.5% of the total change in the inflation rate. ZIMSTAT said:
<blockquote>
The month-on-month inflation rate was 5.8% in September 2024, gaining 4,4 percentage points on the August 2024 rate of 1.4%.
This means that prices as measured by the all-items ZWG CPI, increased by an average of 5.8% between August 2024 and September 2024.
The month-on-month inflation rate was 0.7% in September 2024, gaining 0.5 percentage points on the August 2024 rate of 0.2%.
The year-on-year inflation rate for September 2024, as measured by the all-items USD CPI, was 4.2%.
</blockquote>
ZIMSTAT reported that the Food Poverty Line for an individual in September 2024 was set at ZiG446.56.
The Food Poverty Line indicates the minimum amount of money necessary for a person to access a daily energy intake of 2,100 calories, ensuring basic nutritional needs are met. ZIMSTAT said:
<blockquote>
The Total Consumption Poverty Line for one person in September 2024 was ZiG681,79. The Total Consumption Poverty Line is derived by adding the non-food consumption expenditures of an individual below the food poverty line.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe's money worth less in September causing prices to go up. The new currency, Zimbabwe Gold, is losing value. People are buying and selling it quickly, making it less valuable. This makes it harder for people to buy things they need. The cost of food and drink has gone up the most. In September, it cost ZiG446.56 for enough food to stay healthy. Overall, prices went up by 5.8% from August. It's now more expensive for people in Zimbabwe to buy what they need to live.

Zimbabwe’s Monthly Inflation Rate Surges To 5.8% In September

Zimbabwe’s monthly inflation rose to 0.4% in August 2024 as the local currency, ZiG, depreciated on the parallel market.
Data published by the Zimbabwe National Statistics Agency (Zimstat) on Monday, August 26, shows that the weighted month-on-month inflation rate was 0.5 percentage points on the July rate rate of –0.1%. Said Zimstat:
<blockquote>
The weighted month-on-month inflation rate was 0.4% in August 2024, gaining 0.5 percentage points on the July 2024 rate of –0.1 per cent.
</blockquote>
Zimstat said the US dollar inflation rate for the period was 0, 2% gaining 0.3 percentage points on the July 2024 rate of –0.1 per cent.
The year-on-year inflation rate for August 2024, as measured by the all-items USD Consumer Price Index (CPI), was 3.7%.
For the ZiG currency, the month-on-month inflation rate reached 1.4% in August 2024 and gained 1.5% on the July 2024 rate of -0.1 per cent.
This means that prices as measured by the all-items ZiG CPI, increased by an average of 1.4% between July 2024 and August 2024.
Zimstat said the Food Poverty Line (FPL) for one person in August 2024 was ZiG 405.41. FPL represents the amount of money that an individual requires to afford a daily minimum energy intake of 2,100 calories.
The Total Consumption Poverty Line (TCPL) for one person in August 2024 was ZiG 631.86. The TCPL is derived by adding the non-food consumption expenditures of an individual below the FPL.
Mashonaland East had the highest ZiG inflation rate of 2% followed by Mashonaland West and Manicaland at 1,8% respectively with Mashonaland Central experiencing the least inflation rate at 0,7%.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe's money worth less, prices going up. The inflation rate for August 2024 is 0.5%, higher than July. US dollar inflation rate is 0.2%. Prices increasing for both US dollar and Zimbabwe's currency, ZiG. Year-on-year inflation rate is 3.7%. Food Poverty Line for one person is ZiG 405.41. Total Consumption Poverty Line is ZiG 631.86. Mashonaland East has highest inflation rate at 2%, while Mashonaland Central has lowest at 0.7%. Prices going up, making things more expensive for people in Zimbabwe.

Zimbabwe’s Weighted Monthly Inflation Rises by 0.5%

The introduction of the Zimbabwe Gold (ZiG) currency in April 2024 has had a stabilising effect on the country’s inflation rate, according to the latest data from the Zimbabwe Statistics Agency (ZIMSTAT).
On Friday, ZIMSTAT said that in ZiG, month-on-month inflation was 0% in June (from -2.4% in May), and in USD terms, year-on-year inflation was 3.8% in June, from 3.5% in May.
When measured in US dollar terms, the year-on-year inflation rate stood at 3.8% in June, up slightly from 3.5% in May.
ZIMSTAT also reported that the weighted monthly inflation rate – which combines the price changes in both ZiG and USD – was -0.2% in June, up from -0.6% in May.
The year-on-year ZiG inflation will only be measured starting next April, as that will mark one year since the currency’s introduction. Said ZIMSTAT:
<blockquote>
The month-on-month inflation rate for June 2024, was -0.2%, gaining 0.4 percentage points on the May 2024 rate of -0.6%. The month-on-month inflation rate for June 2024 was 0.0%. This means that prices as measured by the all-items ZiG CPI, remained constant on average between May 2024 and June 2024.
</blockquote>
The agency the Total Consumption Poverty Line (TCPL) which captures all the expenses required for an individual to meet survival needs in June 2024 was ZiG 623.40.
The Food Poverty Line (FPL) which represents the amount of money that an individual requires to afford a daily minimum energy intake of 2,100 calories stood at ZiG 399.83. Said ZIMSTAT:
<blockquote>
The US$ inflation rate for the period of June 2024 stood at -0.3%, shedding 0.4 percentage points on the May 2024 rate of 0.1%. The year-on-year inflation rate for the month of June 2024, as measured by the all-items USD Consumer Price Index (CPI), was 3.8%.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

ZiG Inflation Remains Stable At 0% In June 2024 - ZIMSTAT

On Thursday, President Emmerson Mnangagwa decided to retire Reserve Bank of Zimbabwe (RBZ) governor John Mangudya a month ahead of schedule. This move was aimed at providing space for his successor, John Mushayavanhu, to issue a long-awaited Monetary Policy Statement (MPS), as reported by <a href="https://www.newsday.co.zw/local-news/article/200024983/why-mnangagwa-cut-short-mangudyas-reserve-bank-stay">NewsDay</a>.
Mushayavanhu is anticipated to devise new strategies to stabilize the economy, which is grappling with surging inflation and significant depreciation of the local currency.
According to NewsDay, a source revealed that Mnangagwa found himself compelled to take action after prematurely disclosing the government’s intentions to introduce a structured currency. Said the source:
<blockquote>
It would not have made sense to allow Mangudya to release a Monetary Policy Statement (MPS) when he will be leaving office in a month.
In addition, monetary authorities were under pressure to release the MPS after President Mnangagwa jumped the gun by announcing plans for a structured currency. The announcement caught everyone by surprise.
</blockquote>
Next week, Mushayavanhu is set to unveil the highly anticipated Monetary Policy Statement (MPS), wherein he will delve into the structured currency—a potential long-term remedy for the woes faced by the Zimbabwe dollar.
On Thursday, Deputy Minister of Finance, Economic Development, and Investment Promotion, Kudakwashe Mnangagwa, alluded to forthcoming measures aimed at shoring up the local currency.
Posting on the Ministry’s X page, Mnangagwa advised Zimbabweans against disposing of the Zimdollar. He wrote:
<blockquote>
We have been receiving enquiries about the surge in the exchange rate, which right now can be attributed to the anxiety and anticipation of the upcoming Monetary Policy Statement which is around the corner.
If I were to irresponsibly give unsolicited advice, I would urge Zimbabweans with their hard-earned ZWL not to hedge against it.
Government is committed to ensuring that there will be no loss of value through the introduction of currency stabilisation measures.
</blockquote>
In a notice published in the Government Gazette yesterday, Finance, Economic Development and Investment Promotion Minister Mthuli Ncube said:
<blockquote>
It is hereby notified that His Excellency the President has, in terms of section 14 of the Reserve Bank of Zimbabwe Act [Chapter 22:15] appointed John Mushayavanhu as the governor of the Reserve Bank of Zimbabwe for a period of five years beginning on March 28, 2024 and ending on March 27, 2029.
</blockquote>
In December 2023, Mnangagwa appointed Mushayavanhu as Mangudya’s successor. His official start date was May 1, immediately following the end of Mangudya’s term.
Mangudya’s term was scheduled to conclude on April 30, at which point he would transition to his new role as the Chief Executive Officer of the Mutapa Investment Fund on May 1.
Mushayavanhu faces the formidable challenge of halting the Zimdollar’s rapid depreciation. Over the past three months, it has plummeted by more than 250%, and last year alone, the local currency depreciated by a staggering 700%.
Despite previous efforts, the government’s measures to stabilize the local currency have proven ineffective.
Back in 2022, when the government introduced gold coins to absorb excess local currency, the Zim dollar was trading at a rate of US$1 to ZWL$2,000 on the parallel market.
By yesterday, March 28, 2024, the parallel market rate had surged to ZWL$30,000 per US$1.
The depreciation of the currency has driven up prices, resulting in annual inflation skyrocketing to 55.3% in March from 47.62% in February.
Interestingly, inflation has continued to rise even though more than 80% of transactions now occur in United States dollars.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Here Is What Prompted Mnangagwa To Cut Short Mangudya’s RBZ Tenure

According to the Zimbabwe National Statistics Agency (ZIMSTAT), an average family of six now needs a minimum of ZWL$5.4 million to cover their monthly expenses. This represents a 65.8% increase compared to the figures recorded last month.
ZIMSTAT also revealed that the Total Consumption Poverty Line (TCPL) for one person was ZW$ 916,225.50 in March 2024. Said ZIMSTAT:
<blockquote>
This means that an individual required that much to purchase both non-food and food items as of March 2024 in order not to be deemed poor.
This represents an increase of 65.8 per cent when compared to the February 2024 figure of ZWL$552,745.80.
</blockquote>
The Food Poverty Line (FPL) for one person in March 2024 was ZWL$701,236.89. This means that the minimum needs basket cost that much per person in March 2024. This represents an increase of 62.2 per cent over the February 2024 figure of ZWL$432,454.90.
The Zimbabwe dollar has plummeted over the past few weeks which economic commentators have blamed on the excessive printing of money by the central bank that is not backed by value.
On Friday, March 22, the Zimbabwean dollar crossed a notable threshold, falling below 20,000 against the US dollar. This decline occurred after it had previously dropped below the 10,000 level in late January.
The local currency was trading at 20,389 per greenback, indicating a cumulative decline of 70% since the beginning of the year.
Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, recently Zimbabwe will always have a local currency even though currently, the US dollar is used for 80% of all commerce in the country.
Ncube said the monetary policy statement (MPS), which is overdue by two months, will be released soon, adding that there are ongoing consultations with experts within the government and other stakeholders.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwean Family Of Six Now Requires $5.4 Million Per Month

Zimbabwean annual inflation rose to 55.3% this month from 47.6% in February, which is a seventh-month high, reported <a href="https://www.bnnbloomberg.ca/zimbabwe-inflation-rate-hits-seven-month-high-as-finance-minister-pledges-to-act-1.2052151">Bloomberg</a>.
The announcement by the Zimbabwe National Statistics Agency (ZIMSTAT) on Wednesday, March 27, comes days after the Minister of Finance, Economic Development and Investment Promotion, Mthuli Ncube, pledged to address price increases that are being fueled by the country’s free-falling currency.
Prices rose 4.9% in the month, compared with 5.4% in February.
According to ZIMSTAT, the main contributors to the surge were the cost of food and utilities including housing.
Ncube said at the weekend that the authorities are aware of ongoing price instability in Zimbabwe and monetary policymakers are preparing a statement that will deal with the challenges. He said:
<blockquote>
We are aware that there is currency instability in the main, which then impacts prices. As government, we will act.
</blockquote>
The Zimbabwean dollar has depreciated against the United States dollar every trading day this year.
It weakened 72% in that period, making it the world’s second-worst-performing currency, after the Lebanese pound. Said Ncube:
<blockquote>
In the not-so-distant future, we will be able to make the relevant announcement through a monetary policy statement from the central bank.
We will make sure that we do the right thing and that the new announcement will engender the stability that is needed because we will put in a monetary mechanism that will ensure that we have stability going forward.
</blockquote>
In 2019, the government reintroduced the Zimbabwean dollar after a decade of dollarization. However, the currency rapidly lost value, leading to challenges.
Recently, the central bank and finance ministry have been actively working on additional measures to stabilize the Zimbabwean dollar.
President Emmerson Mnangagwa mentioned the possibility of introducing a “structured currency,” although details were not provided.
Despite these efforts, confidence in the local currency remains low, and economic agents continue to prefer the U.S. dollar.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe’s Inflation Rate At Its Highest In Seven Months

Zimbabwe’s February 2024 year-on-year inflation as measured by the all-items Consumer Price Index (CPI), rose to 47.6%, the Zimbabwe National Statistics Agency (ZIMSTAT) reported on Thursday.
As reported by <a href="https://www.newzimbabwe.com/zimbabwes-annual-inflation-surges-to-476/">NewZimbabwe.com</a>, the latest increase is the fourth in a row since the statistics agency changed its price measure on 28 September to better reflect the use of US dollars in the economy.
The greenback now dominates domestic transactions, with about 80% of all transactions in the country in US dollars.
In contrast, the month-on-month inflation rate fell to 5.4% in February 2024, shedding 1.2% on the January 2024 rate of 6.6%.
This means that prices increased by an average of 5.4% between January 2024 and February 2024.
This comes after manufacturers continue to increase prices which they blame on the introduction of new taxes and rising costs of electricity.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe’s Annual Inflation Rose To 47.6% In February

Zimbabwe’s inflation rate rose in January 2024 as a depreciating Zimbabwe dollar pushed up the prices of goods and services.
The Zimbabwe National Statistics Agency (ZIMSTAT) said the annual inflation rate for January rose to 34.8% from 26.5% in December 2023.
According to <a href="https://businesstimes.co.zw/inflation-spikes-following-zim-dollar-rout/">Business Time</a>s, the Zimbabwe dollar street rate on Wednesday, 31 January was between ZWL$16 000:US$1 and ZWL$17 000:US$1, up from ZWL$8 000 at the beginning of the month.
On the formal market such as the willing seller-willing buyer, the Zimbabwe dollar was trading at ZWL$10 152: US$1, up from about ZWL$5 900 at the start of January 2024.
According to ZIMSTAT, the Consumer Price Index (CPI) was 120.67 in January 2024, 113.22 in December 2023 and in January 2023 the index was 89.49. Between January 2023 and January 2024, the index rose by 31.18.
The month-on-month food and non-alcoholic beverage inflation rate was 15.0% in January 2024, before gaining by 6.4 % points on the December 2023 rate of 8.4 %.
The January 2024 month-on-month non-food inflation rate was 2.5%, shedding 0.4% points on the December rate of 2.9%.
Economist Prosper Chitambara warned that this year’s inflation rate is likely going to continue to rise. He said:
<blockquote>
It is going to increase maybe for the next few months in the short term, then in the medium and long term it is going to depend on what the agriculture sector or agriculture performance if we have good, a normal season then there will be lesser pressure on food prices but if the output is below normal that is going to put a lot of pressure on food prices.
</blockquote>
He also said inflation undermines economic confidence and reduces economic competitiveness. Said Chitambara:
<blockquote>
Inflation is an indirect tax on incomes so it affects businesses and consumers alike in that it causes an erosion of incomes, it also weakens confidence in the economy, it creates uncertainties and self-feeling expectations which then drive the inflation spiral.
So inflation is not good for the economy, it ultimately erodes our competitiveness as an economy.
</blockquote>
Inflation is the rate of increase in prices over a given time. It results from general increases in the costs of the factors of production and/or from an excess of aggregate demand relative to aggregate supply.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Inflation Surges As Zimbabwe Dollar Loses Value

According to Respect Ronald Gwenzi, a financial analyst and MD of Equity Axis, achieving economic stability in Zimbabwe remains a distant goal despite various measures implemented by the government. Gwenzi noted that it has been 13 sessions since the Reserve Bank of Zimbabwe (RBZ) and the Ministry of Finance and Investment Promotion intervened to stabilise the formal currency market in June. However, when considering the entire year, there have been 40 formal sessions. A total of US$646 million has been traded on the formal market, averaging around US$16.15 million per session. We present an excerpt from his article first published by the <a href="https://www.theindependent.co.zw/business-digest/article/200017325/stability-a-stretch-away-currency-market-review">Independent</a>:
<blockquote>
Following the interventions by government highlighted above, sessions conducted per week sometimes increased to two from the primary one session a week, for a period of eight weeks before reversion to one session a week.
The implication of this is to give a collated higher weekly average value traded of US$18,1 million on a year-to-date scale. The aggregate value of funds utilised from the formal market against the total foreign outflows will show a significant decline from the prior year.
The divergence is due to increased utilisation of own funds in settlement of external obligations of purchase of imports. The formal market, however, remains very important as a price discovery mechanism and its failure/success in this regard has far reaching impact to the disposition of the broader economy.
</blockquote>
According to industry estimates, the actual demand on the market exceeds the published positions by the Reserve Bank of Zimbabwe (RBZ). The estimated weekly formal market demand is now around US$50 million, more than double the US$20 million offered by the RBZ. It is believed that the displayed amount is merely for psychological purposes to show the government’s financial strength. Settlement timelines have also been delayed indefinitely, indicating that the RBZ is struggling to meet the demand and fulfil its promises. Furthermore, one of the major market participants noted a significant reduction in their weekly allocations since June, indicating that their demand is no longer fully met through the formal market. Gwenzi added:
<blockquote>
All these developments are reflected not through the rate performance on the formal market but the parallel market. The parallel market has a direct relationship with the formal market and normally exposes the weaknesses of the formal market, which weakness the authorities controlling the formal market would be working hard to conceal.
The parallel, because of its independence, exposes these underlying challenges. Unmet demand from the auction and interbank, typically gravitates towards the parallel market and the result is worsening rates and wider variance between the two markets’ rates.
</blockquote>
The Zimbabwe dollar experienced a 4.5% decline on the formal market, continuing the significant losses observed in the previous week. The cumulative losses over the past two weeks are three times worse compared to the losses in the preceding seven weeks. Additionally, the parallel market has shown instability, with the exchange rate surpassing the US$1:ZW$7,000 mark, resulting in a higher premium. These currency market trends reveal that the formal market is not as free from government influence as previously believed. The government’s obsession with controlling the exchange rate for its own interests negatively impacts the economy. Rising local liquidity supply contributes to the increasing demand, and the temporary suspension of settling dues before elections aimed to stabilize the exchange rate. Gwenzi added:
<blockquote>
The challenge which Zimbabwe faces is that of little fiscus breathing space. There is basically not as much funds to satiate all of the expenses government would wish to absorb.
The undertaking of infrastructure projects using short term debt and basic money printing is an old-fashioned way of speeding up inflationary pressure in the short term.
In the absence of long term cheap external funding, government is cornered as to how it can stimulate economic growth and deliver the developmental agenda.
The inward looking “vene” policies, crowds out investment and reduces competitiveness.
History has shown that short term funding, such as Treasury Bills, cannot be effectively relied on to stimulate growth and aid the budget, especially when the currency is not stable and is in less favour with the populace.
On the horizon, we are, therefore, gazing in a worse off storm, which does not appear to have an aversion solution as yet. The prevailing volatility is a new normal, which we have to brace for over the next five years.
In such an environment, diversification tends to cushion businesses and portfolios.
</blockquote>
According to Gwenzi, businesses that generate hard currency and have shorter product cycles tend to perform well. It is crucial for businesses to pay attention to their balance sheet structure to avoid issues like stockouts, working capital difficulties, high-interest rates, loss of value, and overall insolvency. Managing these factors becomes essential for business success and financial stability.
Gwenzi can be contacted at: respect@equityaxis.net
<h3><a href="https://www.pindula.co.zw/">More Pindula News</a></h3>

Financial Analyst Says Economic Stability In Zimbabwe Still A Distant Goal

Zimbabwe National Statistics Agency (ZIMSTAT) on Monday, 21 August said annual inflation fell to 77.2 percent in August from 101.3 percent in July.
ZIMSTAT also said the month-on-month inflation rate in August was -6.2 percent gaining 9.1 percentage points on last month’s rate of -15.3 percent. ZIMSTAT said:
<blockquote>The year-on-year inflation rate for the month of August 2023 as measured by the all items Consumer Price Index was 77.2 percent…
The month-on-month inflation rate in August 2023 was -6.2 percent gaining 9.1 percentage points on the July 2023 rate of -15.3 percent.</blockquote>
ZIMSTAT said the Food Poverty Line for one person in August was $70 461.00. The Total Consumption Poverty Line for one person was $91 063.00 in August 2023.
The Food Poverty Line (FPL) represents the amount of money that an individual requires to afford a daily minimum energy intake of 2 100 calories. Said ZIMSTAT:
<blockquote>The CPI for August 2023 was 450.43 and 479.79 in July 2023.</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Annual Inflation Falls To 77.2% In August

Zimbabwe’s annual inflation slowed to 101.3% in July 2023 from 175.8% in June 2023, the latest data from the Zimbabwe National Statistics Agency (ZIMSTAT) shows.
ZIMSTAT also said the month-on-month inflation for July was 89.8 percentage points lower to close in negative territory, -15.3% from 74.5% recorded in June.
ZIMSTAT measures inflation using a weighted average of items priced in Zimbabwean dollars and United States dollars.
In May 2023, ZIMSTAT said the country’s month-on-month inflation rose to 15.7% after gaining 13.3 percentage points on the April 2023 rate of 2.4%.
The year-on-year inflation rose to 86.5% in May from 75.6% in April, said ZIMSTAT.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe's Monthly Inflation Drops To  Minus 15 Percent - ZIMSTAT

Economists say the Reserve Bank of Zimbabwe’s Financial Intelligence Unit (FIU) is forcing businesses to enforce “price controls” which is in turn fuelling US dollar inflation.
This comes as the Government has been battling exchange rate volatility and a sharp rise in the prices of goods and services in the past months.
In its latest report, the Confederation of Zimbabwe Industries (CZI) said the enforcement of price controls by FIU is inflationary. Reads the report:
<blockquote>
The FIU has been harshly enforcing compliance with the prescribed principle of “formal exchange rate plus a 10% margin”.
The enforcement of price controls through the exchange rate by the FIU is actually also inflationary as it causes an increase in United States dollar prices at a time when the American dollar has a higher weight in the blending.
In short, the United States dollar inflation is a compliance-driven inflation as formal businesses tried to hedge against an unrealistic official exchange rate that they were being forced to use.
</blockquote>
Economist Gift Mugano told <a href="https://businesstimes.co.zw/fiu-hounds-firms/">Business Times</a> that if the FIU enforces price controls, it will destroy businesses. He said:
<blockquote>
The local firms peg their prices at the prevailing parallel market rate causing the Zimbabwe dollar to be on the high side as the businesses forward price to survive.
If the FIU comes to enforce the indexation of the United States dollar companies would struggle.
</blockquote>
However, Finance and Economic Development Deputy Minister Clemence Chiduwa said businesses should comply or perish. He said:
<blockquote>
Those who continue to index their prices using the parallel market rates will put themselves out of business as consumers have choices so the United States dollar inflation is for the short term and what is critical is for business to adjust.
The reality is that stability is going to be sustained, we are not going to let go and stability is not transitory. It’s now time for business to start to be ethical.
They can hold on to their current position and see what is going to happen. It is going to be sustainable. They are allowed to take their position but they will lose out in US$ terms as the local currency appreciates.
</blockquote>
CZI chief economist Cornelius Dube told Business Times that the Zimbabwe dollar pricing is correlated with the movement of the parallel exchange rate hence the prices will follow that pattern.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

"Price Controls" Driving US Dollar Inflation - Economists

The Zimbabwean government has accused local businesses of driving inflation through unjustified price increases.
Speaking in a recent interview with ZBC News, Finance and Economic Development Secretary George Guvamatanga said Zimbabwe has been experiencing “greedflation”, rather than inflation over the past several months.
He accused the business sector of greediness, which has resulted in rising inflation. Said Guvamatanga:
<blockquote>
What we witnessed over the course of the past two months was not inflation as we know it in economic terms, but rather “greedflation” which is really fuelled by greediness from the corporate sector where their forward-pricing practices resulted in the fast escalation of prices in the shops without any justification.
So Government had to intervene to take the necessary measures to ensure that there is stability in the market.
But of concern too though, is that we still continue to see some sections of the corporate sector, be it the manufacturing sector, as well as the retail sector who are still pricing their goods using prices that are not in line with the current exchange rate.
<div class="wp-video" style="width: 468px;">
<video class="wp-video-shortcode" controls="controls" height="270" id="video-260367-1" preload="metadata" width="468"><source src="https://t792ae.c2.acecdn.net/wp-content/uploads/2023/07/Greedflation.mp4?_=1" type="video/mp4"/><a href="https://news.pindula.co.zw/wp-content/uploads/2023/07/Greedflation.mp4">https://news.pindula.co.zw/wp-content/uploads/2023/07/Greedflation.mp4</a></video></div>
</blockquote>
Zimbabwe’s annual inflation rose to 176% in June from 87% a month earlier after the government partially liberalised the exchange rate.
The Zimbabwe dollar, which has been in free-fall in May and June, has been regaining ground against the US dollar on the official forex auction over the past few weeks.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe Is Experiencing "Greedflation", Not Inflation, Says Govt Official

Zimbabwean President Emmerson Mnangagwa has threatened individual business entities over price increases and accused them of sabotaging his administration.
In a speech to ZANU PF supporters, Mnangagwa blamed private businesses for the current wave of price increases that have eroded incomes and further dampened the country’s economic revival hopes. He warned businesses to make corrections within seven days or face being named and shamed.
Mnangagwa blamed the price crisis on what he saw as unscrupulous practices by private businesses, despite reports suggesting it was triggered by recent payments to companies contracted to do government projects. He said:
<blockquote>
There are some businesses that are fighting us, especially soon after we proclaimed dates for elections.
Prices started going up, and our Zimbabwe dollar was under attack, with the rate going up.
This was done by those who wanted the people to turn against government. We sought to find out who these people are.
Last time, I mentioned some of them. I also have a list of others. But I am going to name them next week in Zaka.
Today, I want to warn them by saying that I sent my people to them about two days ago, to tell them that what they are doing is not right.
So, you have seven days to make corrections. On the seventh day, I am going to name and shame those that do not shape up. Those who are hoarding and those who are manipulating.
We strongly warned some of them that we would name and shame them.
They then begged us not to expose them by saying that our Zanu PF people would not buy from them.
They chose to pay some fines and agreed to change their ways. On Tuesday, we will hear more about some of these businesses.
So, those who are hoarding and manipulating the economy, I say to you, this is Zimbabwe and it is for Zimbabweans.
Either you are with us or you are not with us. If you are with us, we will support you and give you the leeway to do business. But if you are not with us, business rako richaunyana (your business will crumble).
</blockquote>
Zimbabwe’s economy has been hit by massive price increases on goods and services, causing a decline in workers’ incomes and putting pressure on the ruling Zanu PF party to address the issue. Unconfirmed reports suggest that the price hikes were triggered by a recent payment by the treasury to companies contracted for government projects. The government pays suppliers and service providers in local currency, which they then sell in the parallel market for hard currency, causing an artificial increase in exchange rates.
President Mnangagwa has blamed private businesses for the problem, refusing to acknowledge any wrongdoing by his administration. His threats are part of his efforts to solve the economic problems in the country and to be re-elected for a second term in the upcoming elections.
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Mnangagwa Has Threatened Businesses Over Price Increases And Sabotage

The Ministry of Finance and Economic Development has released a statement regarding the billing of rates and services in foreign currency. The statement strongly opposes those who reject the use of the Zimbabwean dollar and issue statements indicating such. The ministry reminds all government agencies and local authorities to comply with the government’s directive to collect fees and levies in local currency, as part of the measures being undertaken to promote the use of local currency. The ministry expresses concern about certain local authorities and government agencies that continue to charge services exclusively in United States dollars, which is not only in contravention of the law, but also against government policy.
The statement seen by Pindula News says the Zimbabwean dollar was adopted as the sole legal tender in 2019, and any billing for services in foreign currencies can only be done if provided for by law or if exempted in terms of the Exchange Control Regulations. The ministry also highlights that persons with free funds cannot be compelled to pay in foreign currency and are free to choose to pay for goods and services in Zimbabwean dollars at the ruling rate on the date of payment. Reads the statement:
<blockquote>
<h3>BILLING OF RATES AND SERVICES IN FOREIGN CURRENCY</h3>
1) Under the National Development Strategy 1, Government has made considerable progress in fostering macroeconomic stability by implementing a broad range of fiscal and monetary stabilization measures. 
2) Resultantly, there has been notable stability in the economy, the exchange rate and general prices of goods and services. 
3) Recently, Government introduced additional measures to promote the use of local currency and these include the settlement of tax obligations in local currency among others, as part of the raft measures being undertaken. 
4) On the 29′ of May 2023, Govemment directed that all Govemment Agencies including Local Authorities should collect fees and levies in local currency in order to promote the wider use of domestic currency. 
5) However, Government notes with concem the outright disregard of this directive by certain Local Authorities and Government Agencies who either have gone ahead to issue notices to the contrary or continue charging services exclusively in United States Dollars. The City of Harare is one such case in point. 
6) The behavior is not only in contravention of the law but also militates against Government Policy. Therefore, all Government Agencies and Local Authorities are reminded to comply with the Government directive with immediate effect. 
7) Government remains committed to the broad use of local currency for domestic transactions which started in 2019 when Government adopted the use of the Zimbabwe Dollar. 
8) Several legal instruments have been promulgated by the Govemment to facilitate the re-introduction of the Zimbabwe dollar namely the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Real Time  Gross Settlement Electronic Dollars (RTGS Dollars) Regulations, published in Statutory Instrument 33 of 2019. 
9) Subsequently, Government Published the Reserve Bank of Zimbabwe (Legal Tender) Regulations through SI 142 of 2019 whose provisions were incorporated in the Finance (No,2) Act, 2019 which provides that: 
• With effect from the 24th of June, 2019, the British Pound, United States Dollar, South African Rand, Botswana Pula and any other foreign currency shall no longer be legal tender alongside the Zimbabwean Dollar in any Transaction in Zimbabwe; 
• The Zimbabwean Dollar shall with effect from 24 June, 2019 be the sole legal tender in Zimbabwe for all transactions, to which the Zimbabwe Dollar refers to bond notes and coins and prescribed electronic money, that is, the RTGS Dollar. 
10) This made the ZWL the sole legal tender for all settlements in Zimbabwe and any billing for services in foreign currencies can only be done if provided for by the law or if exempted in terms of the Exchange Control Regulations. 
11) For the avoidance of doubt, transactions that are excluded from the scope of domestic transactions are clearly stated in the Exchange Control (Exclusive use of Zimbabwe Dollar for Domestic Transactions) Regulations, 2019 published in SI 212 of 2019 and these do not include billing of rates by Local Authorities and charging of services by Government Agencies. 
12) Furthermore, SI 85 of 2020 states that persons with free funds cannot be compelled to pay in foreign currency. They reserve the right to choose to pay for goods and services in Zimbabwe Dollars at the ruling rate on the date of payment. Issued in the public interest.
</blockquote>
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Finance Ministry Warns Against Exclusive Foreign Currency Billing

Zimbabwe’s annual inflation jumped to 175.8% in June from 86.5% in May, the Zimbabwe National Statistics Agency (ZIMSTAT) said on Monday, 26 June.
Reflecting the sharp price hikes over the past few weeks, month-on-month inflation went up by a significant 58.8 percentage points in June to 74.5%, from 15.7% in May.
ZIMSTAT measures inflation using a weighted average of items priced in Zimbabwean dollars and United States dollars.
In March, economist Prosper Chitambara said that using the blended inflation rate is problematic.  He said:
<blockquote>
The issue is a critical one because companies do not account in blended terms but exclusively in USDs or ZWL so it becomes an issue to have the blended rate as the benchmark inflation.
Interest rate calculation for those borrowing or collective bargaining is going to complicate things.
</blockquote>
Chitambara said the publication of both sets of inflation rates (Blended and ZWL) should continue because most employees earn ZWL and would need to use the rate for collective bargaining.
He argued that companies also report in ZWL and will continue to need the ZWL inflation in order to prepare inflation-adjusted figures.
Just over a week ago, Professor of applied economics at the Johns Hopkins University, Steve Hanke, said Zimbabwe’s year-on-year inflation had reached 1 298 percent.
In May 2023, ZIMSTAT said the country’s month-on-month inflation rose to 15.7% after gaining 13.3 percentage points on the April 2023 rate of 2.4%.
The year-on-year inflation rose to 86.5% in May from 75.6% in April, said ZIMSTAT.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe's Annual Inflation Jumps To 175.8% In June - ZIMSTAT

Professor of applied economics at the Johns Hopkins University, Steve Hanke, says Zimbabwe’s year-on-year inflation has reached 1 298 percent as the Government refuses to abandon the Zimbabwe dollar.
The local currency, which was trading at US$1: ZWL$2 577 on 30 May 2023, had moved to US$1: ZWL$5 978 on 13 June at the Reserve Bank of Zimbabwe (RBZ) controlled forex auction.
Posting on Twitter, Hanke said President Emmerson Mnangagwa’s Government is leading Zimbabwe to “ruins” by insisting on the use of the valueless Zimbabwe dollar. <a href="https://twitter.com/steve_hanke/status/1670514970419707904">He wrote</a>:
<blockquote>
#Zimbabwe’s Pres. Mnangagwa is giving a masterclass in economic stupidity and corruption.
With annual inflation at a whopping 1 298%/yr, he continues to try to push Zimbabweans to use the Zim dollar. He is leading Zim to ruins.
</blockquote>
However, Hanke’s measurement of Zimbabwe’s rate of inflation is problematic as he seemingly only considers prices in Zimbabwe dollars, yet around 30% of transactions are conducted in the local currency, with the US dollar now dominant.
The Zimbabwe National Statistics Agency (ZIMSTAT), which measures inflation in the country, considers prices in both ZWL and USD to come up with a blended rate of inflation.
In May 2023, ZIMSTAT said the country’s month-on-month inflation rose to 15.7% after gaining 13.3 percentage points on the April 2023 rate of 2.4%.
The year-on-year inflation rose to 86.5% in May from 75.6% in April, said ZIMSTAT.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

"Mnangagwa Leading Zimbabwe To Ruins", Hanke Claims Inflation Is Now 1 298%

The Consumer Council of Zimbabwe (CCZ) says a low-income urban family of six now needs just over $1 million a month to survive, up from $611 275 in April.
CCZ director Rosemary Mpofu said the cost of living rose by 62% between April and May in Zimbabwe dollar terms.
However, during the same period, the prices of goods and services in United States dollars went down by 31.4 %. <a href="https://www.newsday.co.zw/local-news/article/200012536/family-basket-shoots-to-1m">She said:</a>
<blockquote>
The Consumer Council of Zimbabwe low-income urban earner monthly basket for a family of six stands currently at $1 015 962,61.
This is a sharp increase because the basket has shot from the month of April, where it was $611 275.
When we look at the basket as we measure it, we find out that the low-income earner is mainly earning in the Zimbabwean dollar.
But the cost of living has really increased from the April figure to the May figure and it has constituted a percentage increase of 62.2%.
The new analysis that we use in US$ has decreased by 31.4% so prices have increased in Zimbabwe dollar terms and yet in US$ have decreased by 31.4%.
</blockquote>
The astronomical rise in the cost of living follows a sharp fall in the value of the Zimbabwe dollar over the past few weeks.
Last month, the Zimbabwe dollar fell by nearly 60% on the official market.
On Tuesday this week, the local currency fell from US$1: ZWL$2 577 set by the central bank on 30 May 2023 to ZWL$3 673.
The latest statistics by the Zimbabwe National Statistics Agency (ZIMSTAT) indicate that the annual inflation rose by 11.3 percentage points from April to 86.5% in May.
However, Steve Hanke, a professor of Applied Economics at Johns Hopkins University, argues that Zimbabwe’s inflation is at 717%.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Family Basket Jumps To $1 Million Per Month - CCZ

Zimbabwe’s month-on-month inflation rose to 15.7% in May after gaining 13.3 percentage points on the April 2023 rate of 2.4%.
The year-on-year inflation rose to 86.5% in May from 75.6% in April.
This was said by Zimbabwe National Statistics (ZIMSTAT) director-general Taguma Mahonde in Harare on Friday. He said:
<blockquote>
The month-on-month inflation rate in May 2023 was 15.7% gaining 13.3 percentage points on the April 2023 rate of 2.4%.
The month-on-month inflation rate is given by the percentage change in the index of the relevant month compared with the index of the previous month.
The year-on-year inflation rate is given by the percentage change in the index of the relevant month of the year compared with the index of the same month in the previous year.
</blockquote>
In March this year, Minister of Finance and Economic Development Mthuli Ncube announced that inflation will be measured using a weighted average of items priced in Zimbabwean dollars and United States dollars.
Previously the rate of inflation was based only on items in Zimbabwean dollars.
Former Finance Minister Tendai Biti has said the move by the government to measure inflation using a weighted average of items priced in Zimbabwean dollars and United States dollars is insincere and an attempt to conceal rising inflation.
Biti said the government always comes up with “ridiculous” policies in a bid to cover its “embarrassing failures”.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Monthly Inflation Rate Jumped To 15.7% In May - ZIMSTAT

Vendors in Zimbabwe’s major cities and towns have taken over strategic points, including the verandas of large retail shops, to sell a variety of goods, including basic commodities in foreign currency. This chaos has emerged amid rumours that the vendors’ biggest suppliers are large retailers who are chasing the United States dollar, which is available on the parallel market.
Some retailers are reportedly refusing to transact in the local currency due to various excuses, such as malfunctioning point-of-sale machines.
Consumer Council of Zimbabwe (CCZ) executive director Rosemary Mpofu confirmed reports of the failing electronic payment system. She told <a href="https://www.newsday.co.zw/local-news/article/200011947/are-retailers-dumping-goods-on-the-streets">NewsDay</a>:
<blockquote>
CCZ of late has been receiving consumer complaints from the transacting public, among them retailers charging some products exclusively in US$ only, and rejection of the  Zimbabwean dollar, notably mobile transactions either by phone or swipe cards.
At times, consumers are advised that either the mobile network is poor or lack of connectivity, and non-functioning swipe machines in a bid to harness as much forex from consumers. We appeal to retailers practising such unethical practices to desist as such a move impacts on consumer spending, and limits rights to choice as we are using a dual currency system. The Zimbabwe dollar remains legal tender, that should not be rejected until such a time monetary authorities advise so.
</blockquote>
Denford Mutashu, the president of the Confederation of Zimbabwe Retailers, stated that some unscrupulous businesspeople are responsible for the recent price hikes, which are an attempt to sabotage the government before the general elections. Mutashu described the unwarranted price increases as unnecessary and uncalled for. He also noted that some retailers are deliberately withdrawing point-of-sale machines to reject payments in the local currency. Mutashu said:
<blockquote>
Our position is that retailers should continue accepting the local currency as legal tender. The situation right now is very normal as we are approaching elections. We have a situation where business has suddenly rejected the local currency. It’s difficult to understand the sudden overcharging of goods and services where the parallel market rate has shot up to US$1: $4 000 against the official exchange rate of US$1:$1 500.
</blockquote>
Over the weekend, several major shops and bars in Harare’s residential areas refused to allow consumers access to point-of-sale machines. Some large retail shops announced electronic payment system failures for customers transacting in the local currency via radio paging systems.
Zimbabwe has adopted a dual currency system in recent years, allowing for transactions in both the Zimbabwean dollar and the US dollar. However, the growing demand for the US dollar has raised concerns among industry leaders. Denford Mutashu warned that if left unchecked, this demand could lead to a full-time dollarization of the economy. To prevent this outcome, it is essential for all stakeholders to comply with currency laws, promote financial inclusivity, and protect consumer rights.
A Twitter account, purportedly belonging to President Emmerson Mnangagwa’s spokesperson George Charamba, has referred to the recent events as “false chaos.” The account accused manufacturers and large retailers of deliberately sabotaging the government. Read the Twitter posts:
<blockquote>
FALSE CHAOS: Behind this seeming chaos is the methodical BIG HAND OF BIG BUSINESSES!
They use forex cheaply got from the auction to retool, order raw materials, manufacture, and then redirect their output into the informal sector through their AGENTS. The net result is complete dollarisation they falsely claim hurts them; and evasion of taxes for the very government that nourishes them. #ThisMadnessMustBeStoppedNow!
</blockquote>
The Zimbabwean government has attempted to downplay the currency crisis, stating that it has engaged with the industry to control the soaring prices of basic commodities. In his weekly column for a state-owned newspaper, President Mnangagwa accused the business sector of betraying government efforts to stabilise the economy.
The Zimbabwe dollar has been rapidly losing value, and some supermarkets are pricing their goods exclusively in US dollars to avoid losses. Prices in local currency have been fluctuating daily, leading to panic buying by consumers.
<h2><a href="https://www.pindula.co.zw/">More Pindula News</a></h2>

Zimbabwean Vendors Allegedly Sell Goods In Foreign Currency, With Help From Big Retailers

Award-winning journalist and filmmaker Hopewell Chin’ono says the galloping inflation Zimbabwe is currently experiencing has been caused by bad Government policies.
According to Zimbabwe Statistics Agency (ZIMSTAT), the year-on-year inflation rate for the month of April 2023 as measured by the all items Consumer Price Index (CPI) was 75.2%.
However, American economist Steve Hanke recently said Zimbabwe’s annual inflation stands at 666%.
Posting on Twitter, Chin’ono said President Emmerson Mnangagwa should address the economic fundamentals that are not sound for the economy to function. <a href="https://twitter.com/daddyhope/status/1660238844971606021?s=20">He wrote</a>:
<blockquote>
What I know is that the inflation that Zimbabwe is experiencing at the moment has been caused by terrible and misguided Government policies.
We predicted that this would happen as far back as 2019, this is not rocket science but just common sense.
Using Government draconian decrees on economics will have only one outcome, EMPTY shelves like in 2007/2008.
President Mnangagwa and his regime must stop the State corruption, stop the looting of public funds and stop the plunder of the country’s natural resources which is happening on their watch!
He should stop the abuse of the central bank by ZANU PF political elites and their surrogates, something which has been ongoing since he took office.
He needs to allow good economic policies to be implemented, and not interfere with the running of the central bank.
He should hire or employ competent people hired on the basis of their competence, and NOT party affiliation or ethnicity!
This is just good old common sense! Is he able to do that?
He has failed to do so every day of his life as President of Zimbabwe since the 2017 coup.
All I can say is that political or presidential decrees don’t work, fix the economic fundamentals first!
Since it is a Sunday, I would say he needs to read Mathew chapter 6 verse 33.
It says; “But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you.”
It means if you do your part to make your relationship with God your highest priority, He will do His part to provide for your every need, and that is something we can count on.
In Economics, it means; Implement the fundamentals of economics and you will get results as the economy responds to the fundamentals.
The purpose of work is to increase wealth, and the wealth of a country can only be increased if the leadership of that country understands the covenant of economic fundamentals, and follow them.
The President can shout all he wants from the top of a hill, but if the economic fundamentals are wrong, the economy will not hear, fear or respond to his shouting.
The Herald can write as many propaganda articles as it wants, but the economy will be headed to oblivion regardless.
The inflation this week is at 666%, and the Black Market rate is now at 4 000.
You can’t use button sticks (batons), the police Law and Order section or captured magistrates and jails to force an economy to do as you wish!
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Draconian Decrees On Economics Will Result In Empty Shop Shelves, Chin'ono Warns Govt

Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya said that the gold-backed digital token set to be introduced in the coming weeks will act as a store of value and will also be used for transactions.
Speaking in an interview with <a href="https://www.herald.co.zw/rbz-gold-digital-tokens-to-hit-market-next-month/">The Herald</a> on Thursday, Mangudya said the introduction of the gold-backed digital token is expected to suck excess liquidity from the market and stabilise the Zimbabwe dollar which has been in free-fall on the parallel market. Said Mangudya:
<blockquote>
Inflation, which has also declined in US dollar terms, is expected to further decline, so the outlook is very good.
Going forward, inflation will continue to decline due to stabilising local currency, as the RBZ expects to introduce gold-backed digital tokens.
The gold-backed digital token will act as a store of value, and secondly, they can be used for transactions.
By doing so, this will mop up all the excess liquidity in the market, and stabilise the currency.
</blockquote>
The latest statistics from Zimbabwe National Statistics Agency (ZimStat) show that annual inflation declined by 12.4 percentage points to 75.2 percent in April 2023.
However, on a monthly basis, consumer prices increased by 2.4 percent in April, the most in six months, after decreasing by 0.1 percent in the prior month.
Zimbabwe’s annual inflation climbed to a two-year high of 284.94 percent last year while the monthly rate peaked at 30.2.
Since the beginning of 2023, ZIMSTAT has been measuring inflation using a weighted average of items priced in Zimbabwean dollars and United States dollars.
Previously the rate of inflation was based only on items in Zimbabwean dollars.
Last month, <a href="https://zero.pindula.co.zw/blended-inflation-rate-is-pure-undiluted-heresy-biti/">former Finance Minister Tendai Biti the government to measure inflation using a weighted average</a> of items priced in Zimbabwean dollars and United States dollars is insincere and an attempt to conceal rising inflation. He said:
<blockquote>
Inflation is the measure of the price movement of a good over a period of time. Any good has one price so the blend rate is pure undiluted heresy and is a disingenuous attempt to muddle the ever-rising rate of inflation.
</blockquote>
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

Digital Currency To Stabilise Zimbabwe Dollar - Mangudya

Vice President <a href="https://wiki.pindula.co.zw/Constantino_Chiwenga">Constantino Chiwenga</a> has urged the nation to be calm in response to the sharp decline of the Zimbabwe dollar compared to the United States dollar (USD).
Speaking at the Zimbabwe International Trade Fair (ZITF) International Business Conference in Bulawayo this Wednesday, Chiwenga said the government will continue to pursue measures to maintain exchange rate stability.
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He acknowledged the current exchange rate volatility but assured that it was temporary and exchange rate movements were not catastrophic. He said:
<blockquote>
Bold measures are being implemented by Government to foster price and exchange rate stability in the economy.
These measures include tight monetary and fiscal policy, insistence on value for money for Government procurement and effective monetary and surveillance by the Financial Intelligence Unit (FIU).
The transitory exchange rate volatility in the parallel market witnessed in the economy for March this year is merely a reflection of the store of value demand for foreign currency.
</blockquote>
Vice President Chiwenga stated that Zimbabwe has been experiencing an increase in foreign currency inflows, with a peak of US$11.6 billion in 2022, up from historic averages of around US$5 billion to US$6 billion per year. He added: 
<blockquote>
So, there is no point in rushing as though the world is coming to an end.
Reflecting this positive development, the country has also been recording current account surpluses since 2019, a critical condition for currency stability.
As such, Government is staying the course of the current monetary and fiscal policy measures which have proved effective in restoring and sustaining price and exchange rate stability.
</blockquote>
According to Vice President Chiwenga, the Reserve Bank of Zimbabwe (RBZ) is expanding investment options for individuals and corporations with excess Zimbabwe dollar balances.
He added that the Central Bank is planning to introduce “gold-backed digital products” to complement the Mosi-oa-Tunya gold coins currently available. The former military boss said this initiative will allow for the widespread trading of gold coins, expanding the tradable assets in the economy for storage purposes and reducing the speculative demand for foreign currency.
His remarks come as the <a href="https://zero.pindula.co.zw/prices-of-basic-commodities-have-significantly-increased-survey/">black market exchange rate</a> for the local currency has moved to between $1 800 and $2 100 to the US dollar, compared to the official rate of $1 021.
The decline of the Zimbabwe dollar has resulted in businesses raising the prices of their commodities as they price their products at double the official market.
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VP Chiwenga Calls For Calm Amid Decline Of Zimbabwe Dollar

Professional accountants have engaged the government over the move to measure inflation using a weighted average of items priced in Zimbabwean dollars and United States dollars, the “weighted blended inflation rate”.
Accountants argue the adoption of the weighted blended inflation rate has severe consequences when reporting financials.
Speaking to <a href="https://businesstimes.co.zw/accountants-engage-govt-over-blended-inflation/">Business Times</a>, Institute of Chartered Accountants of Zimbabwe CEO, William Mandisodza, said:
<blockquote>
For now, what I can say is that we are lobbying for some alignment with the policymakers.
Commenting outside those discussions will not create the right environment for ongoing discussions.
</blockquote>
Economist Gift Mugano told the publication that blended inflation was a “rigged methodology”. Said Mugano:
<blockquote>
The major danger here is confidence as the government is not taking responsibility by putting the right measures. It’s like it has run out of ideas.
Government wants to reign in inflation from a rigged methodology and say our inflation is now below 100%.
They are not putting the right measures to deal with inflation and they are now going for rigging and I want to repeat this is pure rigging.
It sends the wrong message in showing that we have failed to deal with inflation.
</blockquote>
He argued that the way the prices are increasing in ZWL$ is different from the way the prices are increasing in US$, therefore, inflation should be calculated using the respective currency either in ZWL$ or US$ but separately. Said Mugano:
<blockquote>
A worker that is paid in ZWL$ is facing a steep price regime whereas the one earning in US$ is enjoying price stability.
It’s not correct to say that the prices in the US have annual inflation of 92%.
That is not correct because prices in hard currency have single-digit inflation.
This is totally misleading and uncalled for.
</blockquote>
In early March 2023, the Minister of Finance and Economic Development Mthuli Ncube promulgated Statutory Instrument 27 of 2023 which read in part, … ‘rate of inflation’ means the general increase in price levels of goods and services measured as a weighted average based on the use of Zimbabwean dollars and United States dollars over a given period of time.”
Using the blended rate, the Zimbabwe National Statistics Agency (ZIMSTAT) said the year-on-year inflation for March was 87.6% and 92.3% in February.
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

Accountants Engage Govt Over Weighted Blended Inflation Rate

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has said inflation has stabilised as 70% of all transactions are in US dollars, reported <a href="https://www.newsday.co.zw/business/article/200009985/inflation-is-not-on-paper-you-feel-it-rbz-chief">NewsDay</a>.
Addressing delegates at the release of the Confederation of Zimbabwe Industries (CZI) 2022 Manufacturing Sector Survey last Thursday, Mangudya, however, acknowledged that there has been a widening between the official forex rate and the parallel market rate. He said:
<blockquote>
We have seen the parallel forex market widening over the past three weeks and we have an idea of what is causing it.
Our job is to make sure that we rein in that disparity between the official exchange rate and parallel market (one) and, of course, the effects to make sure it doesn’t go into the private system.
But on inflation, we are happy that it has been going down from about 30%, month-on-month in July 2022, to 0.7% in January, month-on-month, -1,6% in February, and 0,1% in March this year.
Inflation, Hon minister (Industry and Commerce Minister Sekai Nzenza) and colleagues is — if you are in hyperinflation you will feel it. You don’t see it on paper. Inflation is felt.
If you don’t feel inflation — never worry about people and statistics and don’t worry about historical issues, worry about month-on-month inflation.
</blockquote>
According to Zimstat, the annual inflation for March was 87.6%, down from 92.3% in February, while the month-on-month inflation was 0.1% last month from -1.6% in the comparative prior period.
The statistics were based on the new blended calculation measured using a weighted average of items priced in Zimbabwean dollars and United States dollars.
Before the new “blended rate”, inflation was being measured using the local currency only.
A fall in inflation does not mean prices are decreasing. Rather, it reflects the slow pace of price increases.
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

Zimbabweans Not Feeling Inflation - Mangudya

Zimbabwe’s annual inflation rate dropped to 87.6 percent in March from 92.3 percent in February.
According to data released by the Zimbabwe National Statistics Agency (ZIMSTAT) on Monday, there was a marginal increase in the month-on-month inflation rate. ZIMSTAT said:
<blockquote>
The year-on-year inflation rate for the month of March 2023 as measured by the All-Items Consumer Price Index (CPI) was 87.6 percent this means that prices, as measured by the Consumer Price Index, increased by an average of 87.6 percent between March 2022 and March 2023.
</blockquote>
The month-on-month inflation rate in March 2023 was 0.1 percent gaining 1.7 percentage points on the February rate of minus 1.6 percent.
ZIMSTAT said the key drivers were social services and elements such as health and education.
ZIMSTAT is now measuring inflation using a weighted average of items priced in Zimbabwean dollars and United States dollars.
Before the new “blended rate”, inflation was being measured using the local currency only.
A fall in inflation does not mean prices are decreasing. Rather, it reflects the slow pace of price increases.
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

Zimbabwe's Annual Inflation Rate Falls

Economic commentators and trade unionists have criticised the move by authorities to use blended inflation as the benchmark of inflation reading in the country.
Last month the Zimbabwe National Statistics Agency (ZimStat) said the country will now measure inflation using a weighted average of items priced in Zimbabwean dollars and United States dollars.
Previously, the official rate was based only on items in Zimbabwe dollars in spite of the widespread use of US dollars and South African rand.
ZimStat Director General Taguma Mahonde recently told <a href="https://www.businessweekly.co.zw/blended-inflation-inadequate-for-economy-experts/">Business Weekly</a> that the local currency inflation will not be published anymore. He said:
<blockquote>
The S.I. 27 of 2023 which states that, “rate of inflation” means the general increase in price levels of goods and services measured as a weighted average based on the use of Zimbabwean dollars and United States dollars over a given period of time.
The dissemination of inflation rates with effect from the date of publication of this notice shall adopt this method of measuring inflation.
This implies that only the weighted inflation rates will be published.
For the avoidance of doubt, ZWL inflation figures will not be published as per the provision of the aforementioned SI.
Survey data revealed that 79,32 percent of the transactions occur in USD while 20,68 percent occur in local currency.
The weighted inflation reflects these ratios.
</blockquote>
However, economic commentators say using the blended inflation rate is problematic. Economist Prosper Chitambara said:
<blockquote>
The issue is a critical one because companies do not account in blended terms but exclusively in USDs or ZWL so it becomes an issue to have the blended rate as the benchmark inflation.
Interest rate calculation for those borrowing or collective bargaining is going to complicate things.
</blockquote>
Chitambara said the publication of both sets of inflation rates (Blended and ZWL) should continue because most employees earn ZWL and would need to use the rate for collective bargaining.
He argued that companies also report in ZWL and will continue to need the ZWL inflation in order to prepare inflation-adjusted figures.
Accountant, Kudzanai Mugwamba, said:
<blockquote>
It is tough to be an accountant right now because we are already struggling with which exchange rate is the most relevant one, now we are going to be comparing ZWL inflation-adjusted figures to blended inflation figures which then distorts the reporting.
</blockquote>
Trade unionist Peter Mutasa said:
<blockquote>
Blended inflation does not take into account the reality of most employees as they are predominantly paid exclusively in local currency as employers are refusing to pay in blended form. So this means that workers are going to be shortchanged by being underpaid and carrying the cost of exchange rate losses.
Employers will be at an advantage as they will use a lower and irrelevant inflation figure to calculate wages as there is no publishing of local currency inflation.
We will see workers not being able to feed their families because in reality local currency inflation is real and that is what they earn exclusively.
</blockquote>
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

Blended Inflation Rate Problematic For Economy - Experts

Former Finance Minister Tendai Biti has said the recent move by the government to measure inflation using a weighted average of items priced in Zimbabwean dollars and United States dollars is insincere and an attempt to conceal rising inflation.
Minister of Finance and Economic Development Mthuli Ncube on Friday announced that the country will now measure the “blended” inflation rate.
Biti said the government always comes up with “ridiculous” policies in a bid to cover its “embarrassing failures”. Said Biti:
The Reserve Bank has this incredible but ridiculous capacity of inventing dross and reselling the same.
<blockquote>
Zimbabweans remember the fiction of the 1:1 parity exchange between the Zim $ &amp; the US$.
Operation “gedye gedye” was an embarrassing failure whose sole motive was to cover up billions ..stolen from depositors.
The new fad on the scene is the creature called “ blended inflation “ meant to refer to inflation calculated on a blend of the US$ &amp; the RTGS$.
Inflation is the measure of the price movement of a good over a period of time. Any good has one price so the blend rate is pure undiluted heresy and is a disingenuous attempt to muddle the ever-rising rate of inflation.
Yet another example of incompetence &amp; mendacity of the Central Bank. One trapped in a huge Hypocrisy Trap. Zim inflation remains the highest in the world &amp; no amount of spin can change that.
</blockquote>
Using the blended rate, the Zimbabwe National Statistics Agency (ZIMSTAT) said the year-on-year inflation for February 2023 was 92.3% from 101.5% in January.
Previously the rate of inflation was based only on items in Zimbabwean dollars.
Before Friday’s move to measure the blended inflation rate, ZIMSTAT had measured annual inflation at 229.8% in January and 243.8% in December.
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

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