The Zimbabwean dollar has continually plummeted over a fortnight as the country’s economic crisis worsens.
The currency has crashed as much as 48% since the beginning of the year trading at an all time high of ZWL$35 to the US dollar. At the beginning of the year the local currency was trading at ZWL$20 per US dollar, closing in at ZWL$30 per US dollar at the end of February.
The turmoil comes after the government has dismally failed to boost consumer confidence. Wages have remained stagnant, with an average employee earning less than US$100 per month.
Prices of basic commodities have continued to rise, industry production is low and the drought has induced grain shortages. Market confidence in government policies continues to be subdued as the government still refuses to address human rights reforms,allegations of secret money printing and inconsistent policies.
A year after banning use of foreign currency for domestic transactions, the government has introduced a Statutory Instrument(SI) that allows certain commodities to be sold in foreign currency. These commodities include fuel, passports, hotels and fast food.
Major businesses have thus abandoned the Zimbabwe dollar as a form of exchange preferring to conduct trade in the US dollar or South African rand. “We are pleased to announce that 8 ZUVA DFI service stations that will be accepting foreign currency country wide” read a press release by fuel supplier Zuva Petroleum after obtaining the go-ahead from government.
“There is clear evidence that de-dollarisation is not working as well as the Reserve Bank of Zimbabwe claims. Chicken Inn, Chicken Slice, hotels, tollgates are being allowed to charge in foreign currency” commented publisher Zim Price Check. The dilemma however remains because consumers’ salaries are in the Zimbabwean dollar. Lobbies to have salaries pegged to the US dollar were rejected by government.