Zimbabwe’s annual inflation continues to spiral out of control, hitting a 10-year high of 97.85% in May from 75.86% previously, latest figures from the Zimbabwe National Statistical Agency (ZimStats) show.
The national statistics agency also announced that on a monthly basis, prices rose 12.54% during the same period compared with 5.52% in April.
This is the highest since the introduction of the multi-currency regime in 2009, driven by skyrocketing prices of fuel, basic commodities as well as currency volatility.
The currency volatility worsened after Zimbabwe’s apex bank, the Reserve Bank of Zimbabwe separated real time gross settlement (RTGS) and foreign currency accounts in its Monetary Policy Statement last October.
And the situation has worsened since the introduction of an interbank foreign currency exchange market this February by the RBZ.
The central bank initially set the “official” exchange rate in at US$1:RTGS$2,5 from an initial 1:1 peg.
The official rate has since risen to 6 to the US dollar, reflecting a significant depreciation of the local ‘RTGS$’. But what has worsened inflationary pressures is the prevalence of the black/illegal market, whose rate is currently around 8 to the US dollar.
Independent analysts have projected inflation to close the year at over 250%, while the Government says it expects inflation to start declining in the fourth quarter of the year.