eBusiness Weekly

HARARE – Zimbabwe’s annual inflation gained 0.20 percentage points in June to close the month at 2.91 percent as  prices reacted to unofficial movements in the exchange rate.

Figures released by the Zimbabwe Statistics Agency show that changes in  prices of food and alcoholic beverages, transport as well as recreation  and culture pushed up the inflation rate.

The month of May witnessed a resurgence in the unofficial currency  exchange where the rate of the bond note against the US dollar moved  from $1.45 for $1 to $1.60 for $1 by close of the month.

This impacted on prices and subsequently hit on the inflation rate in  June and the trend is likely to continue as the rate has surged to  nearly one US dollar for $2 bond notes just two weeks before elections.

The official rate remains pegged at 1:1 but cash remains in short  supply in official channels and is diverted to the parallel market where  money changing has become a major business.

Economic experts have noted that the high demand for US dollars by  companies and individuals continues to push up the exchange rate.

Fluctuations in the rate remain unpredictable until after general  elections set for July 30 this year. – New Ziana