ZiG Takes a Hit: Currency Depreciates by 2.86% in May

The Zimbabwe Gold (ZiG) currency has depreciated by 2.86% on the parallel market in May, according to financial services firm IH Securities. This depreciation comes as demand for the US dollar remains high. Meanwhile, the year-on-year US dollar inflation rate slowed down to 13.9%, a 0.5 percentage point decline from April.

The central bank has been closely monitoring inflation after the annual ZiG rate accelerated to 92.1% last month. IH Securities noted that the likely outlook for inflation remains fluid, with recent increases in fuel levies expected to exert pressure on the exchange rate and drive up costs of doing business.

The official exchange rate slightly depreciated from US$1:26.8193 to US$1:26.9102 in May. Month-on-month US dollar inflation slowed to -0.3%, while annual US dollar inflation decreased to 13.95% from 14.4% in April.