The Zimbabwe dollar fell to a new all-time low exchange rate against the U.S. dollar of Z$45,000 on the news that President Robert Mugabe came up mostly empty-handed in his effort to secure a loan from China to relieve acute energy and food shortages, with the consumer cost of living soaring accordingly.
Correspondent David Mutomba of VOA’s Studio 7 for Zimbabwe reported from Harare on the latest lurch lower by the local currency.
Zimbabwe’s dollar seems likely to keep losing value so long as foreign exchange is extremely scarce, said Godfrey Kanyenze, director of the Labor and Economic Development Research Institute in Harare. Demand for foreign currency picked up when the central bank’s said the national fuel market would be liberalized to allow the import and local purchase of fuel by those with hard currency.
Economist Daniel Ndhlela, an advisor to the political opposition, said this partial dollarization of the economy is propelling the Zimbabwe dollar lower.
Mr. Ndhlela told reporter Carole Gombakomba of VOA’s Studio 7 for Zimbabwe that government efforts to underpin the currency have met with failure.