Zimbabwe Is Crashing!… Inflation Soars to 4,530%
Zimbabwe Is Approaching the Crash Point!
Inflation in Zimbabwe reaches 4,530%- Currency plummets 67%- Retailers stop accepting Zimbabwean dollar!
A Zimbabwean holds a thousand dollar banknote in 2006. The Consumer Council of Zimbabwe (CCZ) says the cost of living for an average urban family rose by 66 percent last month.(AFP/File/Desmond Kwande)
The Zimbabwe economy is crashing hard and fast- locals refuse national currency and Regime leader Robert Mugabe blames the situation on the West!
Bloomberg is reporting:
Zimbabwe’s dollar plummeted 67 percent on the black market this week, forcing some retailers and gasoline stations in the capital, Harare, to stop trading.
The currency, officially pegged at 250 against the U.S. dollar, sold for as much as 300,000 a dollar on the streets, where most Zimbabweans exchange their foreign currency, money traders said. It has depreciated from 100,000 earlier this week and from 3,000 to the dollar on Jan. 20.
“Inflation and the exchange rate are running away and out of control,” John Robertson, an independent economist, said in an interview today from Harare. “We’re on a slippery slope that must be coming to an end now.”
Inflation in Zimbabwe, the world’s fastest-shrinking economy, accelerated to 4,530 percent in May, according to NMBZ Holdings Ltd., a Zimbabwean bank. The nation’s statistics agency hasn’t released figures for May yet.
The southern African nation is in its eighth successive year of recession after President Robert Mugabe began seizing white-owned commercial farms for redistribution to black subsistence farmers denied land during white rule. That slashed export earnings, sparking shortages of everything from motor fuel to the country’s staple food, corn meal.
Opposition leader Morgan Tsvangirai, who was beaten by the regime in March, says that Mugabe needs to consider elections as a way out of the crisis.
A farm set on fire in Nyanmandlovu, Zimbabwe, in 2000. The Zimbabwean government has invited white farmers thrown out of their properties during a controversial land seizure campaign to collect compensation for improvements on their farms.(AFP/Odd Andersen)
Things are so bad in Zimbabwe that US Ambassador Dell says that “the Mugabe government is effectively committing regime change on itself”:
Zimbabwe’s currency plunged to new depths on Friday as the U.S. ambassador to Harare predicted galloping inflation will force President Robert Mugabe from office before the end of the year.
The Zimbabwe dollar, which is pegged to the U.S dollar and was effectively devalued by the central bank to 15,000 to the greenback in April, was trading in the 170,000-200,000 range on the thriving black market on Friday.
Just a week before, the black market exchange rate was about 95,000 to one U.S dollar, and 2,500 to one in January.
Once a regional bread basket, Zimbabwe has suffered chronic food shortages since 2001 and is gripped by an economic crisis critics blame on Mugabe’s controversial policies such as the seizure of white-owned farms to resettle landless blacks.
In an interview with the British Guardian newspaper, U.S. Ambassador Christopher Dell said Mugabe’s government was effectively “committing regime change on itself.”
“I believe inflation will hit 1.5 million percent by the end of 2007, if not before,” he said. “I know that sounds stratospheric but, looking at the way things are going, I believe it is a modest forecast.”
Economic analysts said the latest plunge of the Zimbabwe dollar was largely due to public fears that inflation would only get worse coupled with speculation that the Central Bank itself was now purchasing foreign currency on the black market to finance agriculture and other projects, although this could not be independently confirmed.
Mugabe — Zimbabwe’s sole rule since independence in 1980 — has accused the southern African country’s opposition and Western countries of plotting to unseat him and has been accused by critics of a draconian crackdown on political opponents.
The manufacturing sector in Zimbabwe, one of the biggest contributors to gross domestic product, declined seven percent last year, the Confederation of Zimbabwe Industries (CZI), reported here Thursday- Angola Press.