By A Correspondent| Renowned U.S.-based economist and currency expert Steve Hanke has stated that Zimbabwe’s annual inflation rate has skyrocketed to 880%, describing the country’s economy as being “up in flames.”

Earlier this year, in April, the Reserve Bank of Zimbabwe (RBZ) introduced the Zimbabwe Gold (ZiG) currency in a bid to replace the rapidly devaluing RTGS and Bond Notes. These currencies had consistently lost value, and efforts to stabilize them had repeatedly failed.

Upon its introduction, the central bank assured the public that the new currency was backed by 2.5 tonnes of gold and reserves of foreign currency. However, just six months later, the ZiG currency has seen a sharp depreciation. It now trades at a staggering ZWG30 to US$1 on the black market, compared to the official interbank rate of ZWG13.95 to US$1.

In response to the growing economic turmoil, the central bank recently announced a series of measures designed to bolster the local currency. This included injecting US$64 million into the Interbank Market in September alone, aimed at reducing excess ZWG liquidity and stabilizing the volatile exchange rate.

Meanwhile, a joint study by the World Bank and the Confederation of Zimbabwe Industries (CZI) revealed that Zimbabwe lost over US$3 billion between 2020 and 2023 due to mismanagement of the exchange rate system.

Commenting on the situation, Hanke said, “Zimbabwe’s money supply (M2) is soaring at 253% per year. As night follows day, today, I accurately measure Zimbabwe’s inflation at a staggering 880% per year. Zimbabwe’s economy = up in flames,” he wrote on his X (formerly Twitter) account on Wednesday.

Adding to the country’s economic woes, major retailers recently warned that they are on the brink of shutting down due to the severe losses incurred under the country’s distorted exchange rate policies.