Thursday, August 21, 2003
Inflation in Zimbabwe borders on 400 per cent
Associated Press Harare, August 20
Official inflation in economically battered Zimbabwe has risen to nearly 400 per cent and dealers on Wednesday said that black market trading has pushed unofficial hard currency exchange rates up by one-third.
Monthly data from the state Central Statistical Office said that yearly inflation climbed from 364.5 per cent, calculated in June, to 399.5 per cent last month.
Currency dealers said that the dollar was trading on the thriving unofficial market for up to 5,800-1, rising from nearly 4,000-1 a week ago. The official exchange rate is 824-1.
Illegal black market deals have largely been fuelled by panicked buying of hard currency in the crumbling economy, dealers said. The continuing free fall of the Zimbabwe dollar against the US currency has been caused by acute shortages of basic goods, including food and gasoline, out of control inflation and shortages of local cash.
Inflation in neighbouring Zambia is at 21 per cent, compared to 11 per cent in South Africa.
Inflation stands at about 2 per cent in Britain and the United States. The independent Trust Bank said that it calculated current annual food inflation in Zimbabwe at 480 per cent last month. Black market sales of food, gasoline and other scarce essentials at five times the regular price put the rate closer to 700 per cent.
Zimbabwe is suffering its worst economic crisis since independence in 1980, blamed partly on President Robert Mugabe's programme to seize thousands of commercial farms from the white minority for redistribution to black settlers.
The programme is also blamed for worsening a hunger crisis that threatens nearly half of the population. The UN food agency estimates about 3.3 million Zimbabweans are in urgent need of food aid this month, rising to 5.5 million by the end of the year.
The central bank published new laws on Monday giving police the power to seize hoarded cash in a bid to ease local currency shortages.
© Hindustan Times Ltd. 2003. Reproduction in any form is prohibited without prior permission