Zim inflation highest in the world at 207% – Hanke. Official rate much lower

Leonard Sengere Avatar
RBZ, Harare Business District, Forex Foreign Exchange Auction govt, Monetary Policy Committee (MPC), fintech sanbox

If you are living in Zimbabwe you don’t need telling that inflation is getting out of hand. It has been years since you purchased your groceries for the same price in different months. 

Those who earn in forex currency were at one time shielded from this inflation but now prices are going up in USD terms too. The Reserve Bank of Zimbabwe started this when they clamped down on business pegging prices using the parallel exchange rate, leading to businesses simply raising their USD prices.

So, how bad is this inflation? It was telling that the govt had a celebratory tone when announcing that we had tamed the inflation rate to a mere 60.7% to close out 2021. That was good for the 6th highest inflation rate in the world but when taking into account that inflation had soared to 837.53% in July 2020 one can understand why 60.7% felt like a victory.

We’ve taken a few steps back since the turn of the year. Annual inflation rate in January 2022 was 60.6%, 66.1% in February and 72.7% in March. 

The Zimdollar has continued to slide against the USD. On the RBZ’s auction, the Zimdollar’s rate continues to depreciate too. On the 20th of April 2022, one US dollar was worth ZWL$155.14. It was worth ZWL$84.48 on the same day in 2021. That’s an 84% fall in value in just a year.

Those figures are depressing but many agree that they are not even accurate. The actual situation is worse than what these official figures convey, they say. There are a lot of people amused by the Zimbabwean situation and so independently calculate what they think the actual position is. 

Zim first in the inflation olympics

One such economist calculating Zimbabwe’s inflation is Professor Steve Hanke of John Hopkins University. This man has been interested in Zimbabwe since its hyperinflationary period that ended in 2008. 

He says right now Zimbabwe has the highest inflation in the world. In his weekly inflation dashboard he says on the 21st of April 2022 Zimbabwe’s inflation rate stood at a staggering 207%. 

Source: Prof Steve Hanke on twitter

We don’t have the official Zim government April statistics yet but their figure won’t be that high. Let’s look at March to see what the difference was then.

Hanke calculated Zim’s inflation rate at 152% on 31 March 2022, whilst the RBZ reports that it was 72.7%. That is quite the difference. 

I gotta say, whenever I visit a supermarket I feel like it’s closer to what Hanke says than what the RBZ says.

How did Hanke get to his figure?

Hank uses the Purchasing Power Parity method. Using this method we compare the price levels between 2 countries and that ratio leads us to the actual exchange rate. 

Simply put, Purchasing Power Parity = Cost of good X in currency 1 / Cost of good X in currency 2

Economics nerds go nuts with Hanke and Kwok’s formula:



PZIM = the Zimbabwe price level in Zimbabwe dollars (ZWD), 

PUS = the United States price level in U.S. dollars (USD), and 

EZWD/USD = the exchange rate (ZWD per unit of USD).

How it started

In August 2008, the Zim government terminated the reporting of official inflation statistics. It had become too embarrassing to share the increasingly higher figures. I probably would have done the same because the rate was 11.3 million % in July 2008. 

So, with the Zim govt not reporting official stats no one really knew what the actual inflation rate was. That’s when Hanke and Alex Kwok decided to take on the challenge.

They faced hurdles trying to do this because the Zimdollar was not traded freely on an organised market. In addition, the black market was chaotic and there were different rates for cash and non-cash Zimdollars. Are you sure we’re not living in 2008?

In the end they got around this problem and came up with the now famous (and infamous in some other circles) Old Mutual Implied Rate (OMIR).

It’s simple to understand the logic behind that method. They saw how Old Mutual shares were listed on both the Zimbabwe Stock Exchange and the London Stock Exchange. 

With these being shares of the same company it stood to reason that the actual value of the shares in both countries was equal. So, we could calculate the market-based exchange rate by comparing the price of the shares in Zimdollars and pounds. 

The RBZ hated that OMIR and then governor Gideon Gono said the economy was,

…being priced via the Old Mutual rate whose share price movements had no relationship with economic fundamentals, let alone actual corporate performance of Old Mutual itself

Dr Gideon Gono

History repeats itself

It’s 2022 and the data void that plagued the economy in 2008 is back with a twist. 

In 2008 there was no reliable market where the Zimdollar was being traded freely. In 2022 we have the RBZ auction where the Zimdollar is traded. However, most analysts do not think the official auction is reliable because it is not really a free market. The RBZ exerts control over it.

The black market in 2008 was chaotic with multiple exchange rates for cash, debit cards, cheques and bank transfers. In 2022 we can add a mobile money exchange rate to the preceding list of black market exchange rates. 

So, of course the OMIR came back to the rescue but just like in 2008, the authorities were having none of it. 

In March 2020 the ruling party and the Minister of Finance were in agreement and decided to suspend the fungibility of dual listed stocks. Or in English, they made sure shares for companies like Old Mutual that were listed on both the ZSE and another exchange could not be treated as like for like. 

They restricted investors’ ability to trade their Zim bought Old Mutual shares on foreign exchanges. All to kill the OMIR. 

The suspension on fungibility ended in March 2022 and Mthuli Ncube revealed that the govt was ready to restore it. So, OMIR lives to see another day.

Conflicting interests

The Zim govt no doubt wants to report a low exchange rate but this does not automatically mean the official rate is artificially low. However, the actions they have taken to make sure the official auction rate stays low have been questioned by many analysts.

On the other hand, economists like Hanke no doubt get more engagement when they report about crazy inflation rates and so would be partial to reporting high rates. However, they don’t really have a dog in this fight and so are unlikely to play with the figures to come up with higher inflation rates. 

Besides, the PPP method is documented and other economists can verify the calculations.

With all that said, you decide which figures you trust. 


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  1. Imi Vanhu Musadaro

    Waiting for the RBZ to publish a statement on how Hankes formulas are incorrect. 😬

    1. Leonard Sengere

      Definitely see that coming. Hope it all doesn’t lead to them suspending fungibility of Old Mutual shares again.

  2. 123kid

    Im not sure bread in America is that expensive,here is my bitcoin wallet address help me buy bread 1Bmk6yZ9UsjbaRwRXiCJETyagAwhCWk8Ei

  3. Guka Wepa Mbare

    Zimbabwe has most delicious bread at USD2.50 called ED Pfee 2023 . Launched in Epworth recently

  4. Dubezana

    I’m sick of this neocolonialism mindset. Why do Africans like self defecation. You don’t have to believe everything a white person says. If history is to tell us anything is that these people never liked us, so why do we put so much trust in them. Fun fact, playing along with the RBZs exchange rate is actually better for the average Zimbabwean than using these white figures. It means more buying power for us, if we just acted like the zimdollar is trading at 153 to the USD. But I guess people would rather believe the 1:400 one which decreases everybody else’s buying power. Zimbabweans, Why do you hate yourself like that.

    Fun fact 2

    It’s all about belief anyhow, because in case you didn’t know, the us dollar is really also worthless like the zimdollar. It’s all just ink on white paper. The difference between us and the white people in the USA is that when their gvt tells them their currency is worth something they believe it. In fact if you use a black market rate there u will be locked up for a very long time. They take currency manipulation very seriously over there, you can serve 20 yrs in prison for refusing to accept the USD not alone using any other currency for pricing.

    People need to wake up. Your black market rate is not helping anyone you freaking imbiciles.

    1. Imi Vanhu Musadaro

      You seem like one of those people who if a white person tells you that you have stepped in poop and some is still stuck under your shoes, you tell them to go hang, then walk around smelling with a smile on your face.

      Instead of looking at the merits or demerits, of the analysis, you have chosen to hide behind race for your failure to be analytical and factual.

      What black market exchange rate in the US are you talking about. There is none there to use to begin with. False parallels are easy to draw when you have an unsound argument. If you draw parallels, be truthful and compare all aspects.

      Go ahead and see if using the bank rate will make your money go the extra mile this month end!

      1. John

        Of cause they do you imbicile, do you really think Zimbabweans invented the black market.

        1. Imi Vanhu Musadaro

          What’s the black market rate today in the US? 🤣 And, noone said we invented black markets. Read, comprehend, then respond…

      2. Dubezana

        I made a comment filled with rough language and am guessing techzim blocked it. But the jist of it was that white people also have a black market. It’s like a 40% mark-up for clean 100 dollar bills. And it’s different for each denomination and or payment method, but because you think Jesus is white you also won’t believe me. You the type of black people I also hate. You think it’s only your own brothers and sisters who do these type of activities.

        1. Imi Vanhu Musadaro

          Lol. I never promoted or condemned any race. You are the one whose mind is boxed by racism.

          Why is Zinara indexed in US dollars? Why are almost all government fees indexed in US dollars? It’s virtually impossible to find fuel in local currency.

          Only a fool would then blame a white person who had no part whatsoever in setting these policies for our woes.

          Manje, tatobva paEngen tikatodira izare.

    2. b.muja

      Yes it’s all abt perception for money to have buying power and local acceptance but you must know also that perception is cultivated through transparency not clashing polices some1 said USD and bond are equally rated today tomorrow no it’s not equal … That person is the imbecile not common rural area dweller .. ndovanotanga kupa vanhu bad perception then after try act like pane zvozikanwa same RBZ needs to have a Calibre of people who don’t lie and use big Gramma/bookish grams to cover their foolishness wen addressing nation. Who supplies new notes in large quanties to the street ?? That same person is the imbecile wanzwa

    3. Anonymous

      What value dies your currency have fude don’t fool yourself we all no there’s nothing like that.Deep done inside you don’t want to go around with your wallet full of ZW dollars.

  5. Hugh Jarse

    Inflation will rocket up again and the zwd or whatever they call it, will become worthless well before the year is out. I’ve given up on any hope of change, packed and will be gone by June 7, 2022! Useless and destructive zpf, vote rigging and no hope of improvement whatsoever, dictate it’s time to get the hell out of here.

  6. 20

    Dumbzena… If wishes where horses beggars would ride…. You talking about a trillion dollar economy in USA…Elon musk just bought Twitter for 42Billion… What exactly is Zimbabwe making when we have a net import deficit… Bearing pressure on the USD and hence the rate it pushing amount other things…. Let’s not forget our appetite for expensive imported trinkets…. Don’t forget history this country was sold by lobengula for sweets.

    1. Dubezana

      The stupid will always resort to vulgarity when they have no facts or nothing of substance to contribute. As for the Lobengula part, not only is it false, but it’s also tribalistic. You clearly failed O’ Level history or cheated if your comments are anything to go by. I won’t even bother explaining factors that contributed to white colonialism because you clearly have made up your mind. You represent everything wrong with black people, you freaking imbicile.

  7. HM

    Look guys the money being traded at whatever rate belongs to two banks; the the US treasury and the RBZ. If the RBZ prints more money the Zim dollar looses value. Only the RBZ prints money in Zim. They are responsible for flooding the rtgs and cash on the market. If they stop printing then there will be no hyperinflation. Then there will be no Pfumvudza, Accelerated road reconstruction etc. Its a catch 22 situaton.

    1. M2

      I like your take on this. How do other countries manage to keep a relatively stable currency over many decades (take ZAR and BWP as examples). Our currency moves from an exchange rate of 1:1 to 1:400 in just 4 years. Clearly someone doesn’t know what they are doing at the central bank.

      1. Anonymous

        You are controlled by the system, you should be the one controlling the system😂😂😂 you created the system now you are crying. 😂 Victim my foot.😂😂😂 educated now you are fighting, techzim close these comments someone will have a high blood pressure😂im better with my grade 7 at least i know how to laugh.🙊😂😂😂😂

      2. HM

        We have different systems. Since we gained independence those countries are on their 6th or 8th republics. We are only on our 2nd republic.

  8. Anonymous

    Nyika ino lootwa nevene vayo,chingwa 2.50

  9. DelBoy

    Nyika ino lootwa nevene vayo

    1. Anonymous

      You are controlled by the system, you should be the one controlling the system😂😂😂 you created the system now you are crying. 😂 Victim my foot.😂😂😂 educated now you are fighting, techzim close these comments someone will have a high blood pressure😂im better with my grade 7 at least i know how to laugh.🙊😂😂😂😂

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