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Zim dollar in freefall
12/03/2008 21:06 - (SA)
Harare - Zimbabwe's battered dollar has sunk to staggering new lows on the parallel market on the back of growing election jitters.
The currency traded Wednesday at nearly Z$41m to the US dollar and more than Z$81m to the British pound on the parallel market for foreign currency, dealers said.
Just two days ago, the black market rate for the US dollar stood at just over Z$31m. Last Wednesday the rate was Z$29 million to the greenback.
President Robert Mugabe's government artificially pegs the value at US$1 to Z$30 000. At independence in 1980, the local unit was roughly at parity with the pound.
With the currency in free-fall, supermarket prices are rising like never before. Bread in one bakery was selling at Z$9.5m a loaf by Wednesday lunchtime, up from Z$7.5m on Tuesday afternoon.
A box of locally-produced corn flakes was selling for Z$75m and an egg for Z$4m. Many workers on farms seized by the government under its controversial land reform programme only earn Z$30m a month, reports say.
Mugabe has called on the state-appointed National Incomes and Pricing Commission (NIPC) to enforce price controls, state radio reported Wednesday. With inflation running at more than 100 580% at the last count in January, analysts have warned the economic crisis could prove the president's nemesis.
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Zimbabwe Special Report
