Zimbabwe inflation hits 10-year high, what you need to know…

PUBLISHED: Tue, 18 Dec 2018 09:51:58 GMT

HARARE (Reuters) – Zimbabwe’s inflation soared to a fresh 10-year high of 31.01 percent year-on-year in November from 20.85 percent in October after prices of basic goods spiked, amid an acute shortage of dollars that has made imports expensive.

On a monthly basis, prices increased by 9.2 percent in November compared to 16.44 percent in October.

Zimbabwe adopted the U.S. dollar in 2009 after its own currency was made worthless by hyperinflation.

But Zimbabweans have watched as the dollars in their bank accounts, known as ‘Zollars’, have lost value against cash U.S. dollars. That is because there are more Zollars in banks than actual U.S. cash dollars available, analysts say.

Central bank data shows that some $10 billion were being held as electronic dollars in bank accounts but less than $250 million in cash dollars.

On the black market, one needs $3.50 to purchase $1 in cash, a situation which has seen some businesses charging multiple prices for their goods.

Zimstats said prices of food, including bread, of beverages and clothes, had pushed the consumer price index higher.

The finance minister said in a budget statement last month that inflation would end the year at 25 percent before falling to single digits in 2019.

Reporting by MacDonald Dzirutwe; Editing by Joe Brock and Gareth Jones

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