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The Zimbabwe Gazette Daily News Online

Thursday
Feb 28th


Last Updated: February 28, 2008, 1:39 pm  ET

   
Home arrow General News arrow Zimbabwe Dollar Takes Heavy Knock
Zimbabwe Dollar Takes Heavy Knock PDF Print E-mail
(7 votes)

By Lee Shungu, on January 21 2008 14:26

Favoured : 4


The Zimbabwean dollar took a heavy knock against other currencies during the weekend, a couple of days after the Reserve Bank of Zimbabwe (RBZ) governor, Gideon Gono introduced the new set of higher denomination bearer cheque notes.

Ten Million Dollars
Ten Million Dollars
The Zimbabwe Gazette can reveal on the illegal parallel (black market) - which is the main source of foreign currency in the country, the United States dollar is now trading at $5 million, up from figures around $2 million last week. The South African Rand is also now trading at levels around $750 000, up from around $500 000 last week.

Market sources indicate the local currency which was for a long time not sufficiently available, was now slowly becoming accessible and to a larger extent, this has prompted the other currencies to shoot up. Commodity and service providers have also increased prices and fares on the back of the introduction of more new notes.

One parallel market trader confirmed the rates of major currencies have indeed shot up to much higher levels, in a short space of time.

"It all started around Friday, last week. On Saturday, the US$ rate was at $4.5 million, and today it is at $5 million."

"It seems the Zimbabwean dollar will continue to lose ground in the near future," he said.

The Zimbabwe dollar's losing ground against major currencies has been cited as a reflection of the rise of real prices of commodities relative to prices of the same goods in US dollars.

Market watchers say due to the cash shortage, there existed a two-tier rate, especially for the US dollar namely; the cash and transfer rates.

"The cash rate was lower and usually prevailed at figures around Z$1.8 million to the US dollar because cash was not available in circulation," said one stockbroker.

"The transfer rate (RTGs) was higher at levels around Z$1 to US$5 million because no cash would be involved in the transactions.

"Now that cash is available in the market, the two-tier rate system has been abolished," he said.

In and around the city of Harare, over the weekend, prices of goods and commodities have increased by more than 100 percent.

A 2 litre bottle of cooking oil which cost $12 500 on Friday, now costs not less than $26 million. A 5kg bag of rice which cost $15 million now fetches for $44 million, among other things.

An analyst with a local financial institution says though local businessmen mark their prices in local currency, most of them tend to align the prices with the US dollar.

"If the US dollar shoots up, businesses hike their prices and fares in relation to the US dollar."

"This has been most familiar with fuel, in which most service stations which import the commodity for themselves tend to charge in US dollars," he said.

In October, an exchange rate of US$1 to $840 000 prevailed.

On November 14, 1997, the Zimbabwe dollar lost 71.5 percent of its value against the United States dollar. In local business circles, this day has since been marked, 'Black Friday'.

The stock market subsequently crashed, wiping away 4 percent from the value of shares as investors scrambled out of the Zimbabwe dollar.




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Display 4 of 4 comments

Give us news pliz

By: mhunga mapfunde (Guest) on February 07 2008 11:32

Give us news pliz

By: mhunga mapfunde (Guest ) on February 07 2008 11:32

Give us news pliz

 

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grace's nanga

By: eee (Guest) on February 04 2008 15:00

grace's nanga

By: eee (Guest ) on February 04 2008 15:00

;) 
:eek :zzz :sigh :? :cry :(  
terrible innit

 

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Mr

By: Calvin Mulozo (Guest) on January 22 2008 09:23

Mr

By: Calvin Mulozo (Guest ) on January 22 2008 09:23

It breaks my heart to see brother strike brother. How can we as Black brothers continue to feud against each other. We have worked so had to build and are not worried about how fast its all breaking down. If you take time to look most of African's people are in one form of war or another with each other. I say to you my brothers and sisters, is this not what the Britons and the Americas of this world want. So that they can come and loot and Plunder some more of our African wealth? This is exactly what they want, them our formal colonial masters, lets stop all this, the Kenya, Zim issues

 

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Zimbabwe Dollar

By: Bhekizwe (Guest) on January 22 2008 07:12

Zimbabwe Dollar

By: Bhekizwe (Guest ) on January 22 2008 07:12

As long as the Zimbabwe government officials benefit from the crisis in Zimbabwe we should expect no light at the end of the tunnel. 
 
The question that needs answering is :who benefits most from controlling the exchange rate ,prices and fuel. The answer is not harder to find:ZANU-PF officials:Those who get free fuel ,free maize and special forex rates which they retrade in the black market: Yes there are prepared to kill to keep Mugabe in power.

 

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