Zimbabwe dollar crashes to all time low

Zimbabwe dollar crashes to all time low

• Zimbabwe crisis to worsen - analysts

• Inflation shoots up, again

• Murerwa wants end to price controls

• Zim inflation surges by 90 percent

• Murerwa slashes ministerial budgets

• Top businessman Naran dies

• SA approves US$1bn credit line for Zim

• RBZ devalues Zim dollar by 40 percent

• Zimbabwe faces economic meltdown

• Gono's economic plan crumbles as inflation shoots up

• Patrick Mlambo: A 100 reasons why Gono should resign

• Gono wants white farmers back

• Central back chief admits failure

• Gono revises inflation target 100 percent upwards

• Gono's 'sleepless nights' over inflation

• Gono fighting a losing battle

• Gono, the Zimbabwean Napoleon

• Patrick Mlambo: The small minds in charge of our economy

• Chido Makunike: Overcoming the 'Messiah Complex'

• Zimbabwe dollar depreciates by 4 percent

• Inflation accelerates once again

• Gono predicts inflation to fall to 20%

• Zim fools no-one with 9% unemployment claim

• Zim claims on lowered inflation unconvincing

• House prices bite Zimbabwe's poor

• Reserve Bannk cautions against paying ex-political prisoners

• $200bln windfall for ex-political prisoners

• Zimbabwe's inflation seen dipping to 160%

By Staff Reporter

ZIMBABWE'S dollar is set to be devalued again after black market rates soared this week amid a worsening foreign currency shortage, analysts said Wednesday.

The currency has plunged to a historic low of 75,000/US dollar, about three times the 26,000 official rate quoted at central bank controlled auctions — sparking fears that inflation will once again spiral out of control.

The British pound is fetching $120 000 against the Zimbabwe dollar, the first time in history that it has broken the 100 000 barrier. At independence in 1980, the Zimbabwe dollar was more powerful than the pound.

Stablising inflation is key to the central bank’s efforts to revive an economy in recession for the past six years.

Chronic foreign currency shortages have gripped Zimbabwe, one of the major signs of the country’s worst economic crisis since independence in 1980 that critics blame on mismanagement by President Robert Mugabe’s government.

"We are in a very critical situation ... the Reserve Bank will have to devalue the currency to improve inflows. It is critical that we have a convergence of the black market and the auction rates if we are to stabilise the exchange rate," independent economist John Robertson said.

Central bank Governor Gideon Gono is expected devalue the currency when he presents the quarterly monetary policy next month. Gono has previously said the exchange rate will be reviewed in line with inflation.

The bank has devalued the dollar three times since May this year, when the currency stood at 6,200 to the dollar.

Inflation was at an annual rate of 265,1% in August, but has subsided from a record peak of 623% in January 2004.

Analysts predicted that inflation will be between 305 and 350% in the year to September.

"Gono has no choice but to adjust the rate because September inflation figures will be steep, which will put pressure on the exchange rate," Witness Chinyama, chief economist at Kingdom Bank said.

Zimbabwe’s monthly import bill is estimated at $250m, but exports are yielding an average of $109,4m a month.

The country has been without balance of payment support since 1999 after the International Monetary Fund and donors withdrew financial aid over policy differences with the government, particularly the seizure of white owned farms - Reuters
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