Renowned American economic commentator Steve Hanke says Zimbabwe’s currency, Zimdollar depreciated by 98 percent against the American dollar.
He says the country is experiencing its third episode of hyperinflation in 15 years.
“Since Jan 2022, the Zim dollar has depreciated against the USD by a staggering 98%. Zim is in 1st place in this week’s Hanke’s #CurrencyWatchlist, and is experiencing its 3rd episode of hyperinflation in 15 years,” he says.
Apparently, Hanke adds that it is surprising that President Emmerson Dambudzo Mnangagwa is seeking re-election saddled with a bad track record.
“After turning ZIM into a nation with the world’s highest inflation rate by my measure (1228%/yr), Pres. Mnangagwa now promises to do “what we can to remain in power.” Mnangagwa and the Zanu-PF party are doing everything in their power to rig the election.
“Zimbabwe Pres. Mnangagwa registered to run for reelection on Wed. Under his rule, Zim entered a hyperinflation episode on Jun 12th and was the MOST MISERABLE COUNTRY IN THE WORLD in the Hanke 2022 Misery Index. What a disastrous track record,” says Hanke.
He is on record calling on the Harare administration to dump its local currency and fully dollarise.
However, President Mnangagwa is sticking to his guns saying the Zimdollar is here to stay.
Background, in 2008, the inflation rate accelerated dramatically, from a rate in January of over 100,000% to an estimated rate of over 1,000,000% by May, and nearly 250,000,000% in July.
As predicted by the quantity theory of money, this hyperinflation was linked to the Reserve Bank of Zimbabwe increasing the money supply.
Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly. The Laspeyres formula is generally used.