Zimbabwean annual inflation rose to 55.3% this month from 47.6% in February, which is a seventh-month high, reported Bloomberg.
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:
We are aware that there is currency instability in the main, which then impacts prices. As government, we will act.
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:
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.
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.