Exchange rate stability drives down Producer Price Index

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  • PPI rate of change for September was 0.97%, month on month
  • The year on year PPI rate of change stood at 765.54%

Harare – The Zimbabwe National Statistics Agency (ZimStat) has reported that the month on month rate of change of the Zimbabwean Producer Price Index (PPI) for September 2020 was 0.97% after shedding 4.71 percentage points on the August 2020 rate of 5.68% driven by exchange rate stability.

PPIs provide measures of average movements of prices received by the producers of various commodities. They are often seen as advanced indicators of price changes throughout the economy, including changes in the prices of consumer goods and services.

The year on year PPI rate of change stood at 765.54% in September 2020 while the PPI itself stood at 3545.14 compared to 3511.24 in August 2020 and 409.59 in September 2019.

Meanwhile, the retail inflation, measured by Consumer Price Index (CPI) fell to 659.40% in the month of September 2020 shedding 101.62 percentage points as compared to 761.02% in August, according to the Zimbabwe National Statistics Agency (ZIMSTAT).

This trend in CPI and PPI comes on the back of the Zimbabwean dollar constantly gaining against the United States Dollar since the 1st of September which resulted in prices of commodities and services stabilising and a stable parallel market rate.

These shifts in the exchange rate have been witnessed since the beginning of July after the reintroduction of the foreign currency auction system by the central bank.

 The official exchange as at 3 November 2020 was USD1: ZWL 81.6740.

Equity Axis News.

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