{"id":72672,"date":"2023-01-17T15:29:27","date_gmt":"2023-01-17T13:29:27","guid":{"rendered":"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/top-economist-predicts-sharp-rise-in-inflation-exchange-rates-by-june-2023"},"modified":"2023-01-17T18:10:40","modified_gmt":"2023-01-17T16:10:40","slug":"top-economist-predicts-sharp-rise-in-inflation-exchange-rates-by-june-2023","status":"publish","type":"post","link":"https:\/\/www.africa-press.cc\/zimbabwe\/all-news\/top-economist-predicts-sharp-rise-in-inflation-exchange-rates-by-june-2023","title":{"rendered":"Top Economist Predicts Sharp Rise In Inflation, Exchange Rates By June 2023"},"content":{"rendered":"

Africa-Press – Zimbabwe. <\/strong><\/span>Economic commentator Gift Mugano has predicted that Zimbabwe\u2019s annual inflation will be 400% with the exchange rate likely hitting ZWL$1500: US$1 by June this year.<\/p>\n

The Zimbabwe dollar is currently trading at ZWD$1.100 to the USD on the black market, reported NewZimbabwe.com.<\/b><\/p>\n

Year-on-year inflation was also the highest in the world at 255% in November last year.<\/p>\n

Responding to claims by the Reserve Bank of Zimbabwe (RBZ) governor John Mangudya, that the country\u2019s de-dollarisation was on course, Mugano said on the contrary, the central bank\u2019s policies are driving dollarisation.<\/p>\n

He argued that chronic inflation and the 200 percent interest rate are some of the main drivers of dollarisation. Said Mugano:<\/p>\n

I am still convinced that the following remains our economic outlook by June 2023; annual inflation of 400% and exchange rate ZW$1500\/US$1.<\/p>\n

… we have deepened dollarisation. The main drivers of dollarisation are chronic inflation, 200% interest rate, excess liquidity caused by Treasury and domestic export retention as well as high export retention.<\/p>\n

With a 200% interest rate, businesses have switched to USD loans since it has virtually become impossible to pay back loans fourfold.<\/p>\n

The 20% domestic export retention and 40% export retention compels RBZ to print ZWL in exchange for the 20% domestic deposits and 40 percent export receipts.<\/p>\n

RBZ does not have a budget set aside for this. This drives up money supply. In August and September 2022, money supply rose by $708 bn excess liquidity driven by the treasury.<\/p>\n

Mugano noted that excessive liquidity driven by treasury is driving inflation and de-dollarisation cannot be achieved in such an environment. He said:<\/p>\n

Excessive liquidity driven by treasury \u2013 without going far, in December 2022, treasury irresponsibly made last-minute payments to Ministries and government departments\u2019 requests thereby putting the rate into disarray.<\/p>\n

The Treasury could have staggered these payments during the course of the year.<\/p>\n

Inflation and de-dollarisation can only happen when the country attains single-digit inflation and exchange rates are stable.<\/p>\n

This will cultivate a productive culture which is key to supporting the local currency. This is missing. We have chronic inflation and volatile exchange rates.<\/p>\n

To further prove his point that the economy is dollarising, Mugano pointed to the sudden decline of allotment from the RBZ\u2019s auction system. He said:<\/p>\n

The auction system allotment is an interesting one. In 2022 imports surged to above US$ 8.2 billion (exceeding 2021 imports by US$1 billion) but the USD allotted to firms declined from US$42 million per week to US$11 million.<\/p>\n

So imports are increasing but the forex given by the RBZ to firms to support imports is falling.<\/p>\n

It tells you one thing, firms are now relying on their own generated forex from local sales to meet their import requirements.<\/p>\n

This means that we have deepened dollarisation.<\/p>\n

For More News And Analysis About Zimbabwe<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Zimbabwe. Economic commentator Gift Mugano has predicted that Zimbabwe\u2019s annual inflation will be 400% with the exchange rate likely hitting ZWL$1500: US$1 by June this year. The Zimbabwe dollar is currently trading at ZWD$1.100 to the USD on the black market, reported NewZimbabwe.com. Year-on-year inflation was also the highest in the world at […]<\/p>\n","protected":false},"author":84,"featured_media":72671,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,6],"tags":[1493,2189,8376,2228,13075,8693,19],"class_list":{"0":"post-72672","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-all-news","8":"category-economy","9":"tag-africa-press","10":"tag-africa-press-zimbabwe-2","11":"tag-de-dollarisation","12":"tag-dollarisation","13":"tag-full-dollarisation","14":"tag-gift-mugano","15":"tag-zimbabwe"},"yoast_head":"\nTop Economist Predicts Sharp Rise In Inflation, Exchange Rates By June 2023 - zimbabwe<\/title>\n<meta name=\"description\" content=\"Economic commentator Gift Mugano has predicted that Zimbabwe\u2019s annual inflation will be 400% with the exchange rate like ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/top-economist-predicts-sharp-rise-in-inflation-exchange-rates-by-june-2023\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Top Economist Predicts Sharp Rise In Inflation, Exchange Rates By June 2023\" \/>\n<meta property=\"og:description\" content=\"Economic commentator Gift Mugano has predicted that Zimbabwe\u2019s annual inflation will be 400% with the exchange rate like ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/top-economist-predicts-sharp-rise-in-inflation-exchange-rates-by-june-2023\" \/>\n<meta property=\"og:site_name\" content=\"zimbabwe\" \/>\n<meta property=\"article:published_time\" content=\"2023-01-17T13:29:27+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-17T16:10:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/zimbabwe\/sites\/14\/2023\/01\/postQueueImg_1673956774.31.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"720\" \/>\n\t<meta property=\"og:image:height\" content=\"402\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/top-economist-predicts-sharp-rise-in-inflation-exchange-rates-by-june-2023\",\"url\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/top-economist-predicts-sharp-rise-in-inflation-exchange-rates-by-june-2023\",\"name\":\"Top Economist Predicts Sharp Rise In Inflation, Exchange Rates By June 2023 - 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