Zimbabwe’s annual inflation rate for the month of March, 2019 propelled to 66.80% as the country’s statistics body moved to announce a new base to calculate the consumer price index (CPI). But under the old system used until this February, the rate for March would have hit a shocking 166% (although the country has experienced much worse inflation rate during the hyperinflation era of circa 2007/8. But the fact remains that Zimbabwe is now already in a hyperinflation environment. Hyperinflation is very high and typically accelerating inflation, which quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimise their holdings in that currency as they usually switch to more stable foreign currencies, often the United States dollar which largely underpins Zimbabwe’s multicurrency system.
According to the Zimbabwe National Statistics Agency (ZimStats), the country’s annual inflation reached 66.8% last month after gaining 7.41 percentage points from the month of February. Month-on-month inflation during the same period was 4.38% up from 1.67% in February. “With effect from March 2019 Zimstat is publishing the new Consumer Price Index (CPI) with new weights and classification in accordance with international guidelines,” it said “The implementation of the COICOP (Classification of Individual Consumption by Purpose) is also part of the harmonisation project of Consumer Price Indices in different regions like the SADC region.” ZimStats said using a similar method of calculating inflation will allow inter-country comparisons of the CPI and the rate of inflation. Price increases in the country were worsened by a decision made by the Reserve Bank of Zimbabwe (RBZ) in February to float the country’s exchange rate of the local RTGS dollar to the United States dollar, which was previously fixed at an artificial and largely viewed as unsustainable 1:1. The local currency has since been losing value with the inter-bank rate seemingly chasing the illegal rate. http://insidebusiness.co.zw/zimbabwe-officially-in-hyperinflation/