Zimbabwe’s month-on-month inflation rose to 5.8% in September 2024, from 1.4% in August, a condition largely attributed steep depreciation of the newly introduced currency, the Zimbabwe Gold (ZiG).
Since its inception in the first quarter of 2024, the new currency has faced increasing volatility, compounded by the shortage of US dollars in the market.
The central bank has attributed the currency’s fall 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: “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%.
Apparently, Zimbabwe’s gold-backed currency weakened further against the dollar on Monday after a 43% devaluation on Sept. 27.
The ZiG was quoted at 24.88 per dollar on Monday, compared with 24.39 per dollar on Friday, according to data compiled by Bloomberg.
The Reserve Bank of Zimbabwe (RBZ) recently devalued the fast-depreciating ZiG by nearly 50 percent.
This came after threats by some big retailers to shutdown their businesses if they are being forced to sell commodities in the local currency currently trading at more than 33 ZiG per U.S dollar on the black market.
The RBZ published the new US/ZiG rates on its official website, showing that the ZiG has been devalued to 23.4 to the U.S dollar from 14.
The RBZ Monetary Policy Committee, which met recently in the capital recommended that the central bank should allow greater exchange rate flexibility in line with increased demand for foreign currency in the economy.
The committee also recommended that the bank should reduce the amount of foreign exchange an individual can take out of the country from US$10,000 to US$2,000.
Zwnews
