Foreign currency dominates in Zim

THE economy in Zimbabwe is now virtually based on foreign exchange, a state daily newspaper said at the end of last week, with fewer goods and services available in the local dollar which is rapidly losing its worth because of galloping inflation.

‘A survey by The Herald this week revealed a significant drop in demand for the local unit as very few shops and traders were still selling products in Zim dollars,’ the newspaper reported.
One US dollar is worth four million Zim dollars at the official exchange rate and three billion Zim dollars on the black market.
Most traders and service providers from street-side vegetable vendors to mobile phone service providers are pegging their prices in foreign currency.
Since September last year, Zimbabwe’s central bank has licensed at least 1 000 shops to sell goods in foreign currency in a move aimed at helping businesses suffering from a chronic shortage of foreign currency to import spare parts and foreign goods.
Other shops and service providers have followed suit although they have not been authorised by the government and despite warnings that those arrested for flouting foreign exchange regulations would be prosecuted.
A single journey by minibus within Harare costs one US dollar while hired taxis charge at the rate of one dollar per kilometre.
In the latest move, the authorities licensed mobile phone service providers to charge for airtime and other services in foreign currency.
The Herald said the prevalent use of foreign exchange is threatening the once flourishing parallel foreign exchange market as traders get fewer people in need of the local currency.
– Nampa-AFP