Zimbabwe to use blended inflation measure


Starting end of March, Zimbabwe is to use a blended inflation average to measure the country’s official inflation rate.

The announcement was made by the Reserve Bank of Zimbabwe Governor, John Mangudya, After years of the Southern African country being affected by hyperinflation, Zimbabwe reintroduced the Zimbabwean dollar in 2019 but this was heavily affected by the covid-19 pandemic.

Zimbabwe dollars.

Thus as a mitigating measure, the usage of the US Dollar was reintroduced to help curb inflation.

‘‘As monetary authorities, we realised that we have been using incorrect monetary dynamics to come up with inflation figures, hence going forward, the inflation figures will be blended because we are officially using the dual currency since 2020, hence it is critical that our inflation also reflects the dual currency composition to give a true reflection of what is obtaining in our economy,” said the governor John Mangudya, 

What is the Blended Inflation measure?

This is a measure that combines the average change in the prices of goods and services when more than one currency is used.

In the case of Zimbabwe, the country uses two official currencies (Us dollars and Zimbabwean Dollars) so a combined measure of the change in prices across both currencies will be used.

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