By Business Reporter – The Bankers Association of Zimbabwe (BAZ) has issued an alarming warning that the country may face a resurgence of 2008-style hyperinflation, with spiralling prices and empty store shelves, following the rapid devaluation of the Zimbabwe Gold (ZiG) currency.
The recent devaluation by the Reserve Bank of Zimbabwe (RBZ) pushed the official exchange rate from ZiG14.1 per US$1 to ZiG24.3, further weakening to ZiG25.2 this week.
According to a leaked internal report, BAZ cautioned that continued depreciation could trigger rampant inflation and shortages of essential goods, a haunting reminder of the 2008 economic crisis when Zimbabwe faced over 79 billion percent inflation.
The BAZ document warns of price hikes on basic items like food and fuel, exacerbating inflationary pressures already evident in the economy.
The association also noted that the RBZ’s increase in interest rates, from 25% to 35%, and a 30% hike in statutory reserve requirements would worsen borrowing costs, limit investment, and further fuel inflation.
With the informal sector at risk due to restrictions on foreign currency transfers, Zimbabwe’s fragile economy could see job losses and severe disruptions.
The rising economic instability may erode confidence in the local currency, drawing comparisons to the devastating economic collapse of 2008 when goods vanished from store shelves and the population faced extreme hardship.