Day By Day

Sunday, July 31, 2005

Zimbabwe Update -- Currency Collapse

ZWNews reports:
The largest crash of the Zimbabwean dollar took place in the last six days as desperate motorists went looking for foreign currency to fund fuel imports. A week ago the Zimbabwe dollar was trading at about Z$25 000 to US$1 on the parallel market where many manufacturers source foreign currency to fund imports. On Thursday it had touched Z$45 000 to US$1. The rand was selling at Z$6 000 but buyers were paying Z$7 000. The unofficial exchange rates are available at any street corner from vendors trading opposite hotels frequented by foreign visitors. The official exchange rate was set last week at Z$17 000 to US$1, a 40% devaluation. Simultaneously the Reserve Bank of Zimbabwe announced that anyone with access to foreign currency would be allowed to use it to import fuel, on a no-questions-asked basis. Fuel importers say there has been a scramble for forex since then, sending the parallel market on a downward spiral which shows little sign of slowing down. Economist John Robertson said an inflation rate of 1 000% was possible by year end.
The spiral into the abyss continues and there is little, it seems, that anyone is willing to check Mad Bobby Mugaby in his reckless, racist, socialist careen. Such is the legacy of anti-colonialism. Reason is suspended, hatred flourishes, and rational discourse is paralyzed.

Read about it here.

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