ZiG devaluation effect felt as ZimStat publishes inflation figures

Latest inflation figures from the Zimbabwe Statistics Agency (ZimStat) show the impact of the Zimbabwe Gold (ZiG) devaluation in September.

Monthly (ZiG) inflation rose from 5.8% in September to 37.2% in October, ZimStat
reported today.

This reflects the price increases that happened after Reserve Bank of Zimbabwe devalued the ZiG by 43% late in September.

The reserve bank said the devaluation was in response to a ‘resurgence in exchange rate pressures,’ which manifested in ‘the widening parallel market exchange rate premium and the increase in inflationary pressures.’

In an interview with the Zimbabwe Broadcasting Corporation this month, RBZ Governor John Mushayavanhu said the move “was not a devaluation but a manifestation of what was already happening on the market”, referring to the depreciation of the ZiG in the months since its launch.

While the ZIG has been devalued to about US$1:25, it is still playing catch-up with the parallel market, which is hovering around US$1:32.

The latter is closer to renowned global inflation monitor Professor Steve Hanke’s estimate of 67% devaluation of the ZIG since its introduction.

Zwnews