Zimbabwean consumers are feeling the shock of yet another round of price increases for food and transport driven, economists say, by the Zimbabwe dollar’s continued tumble against the U.S. dollar and other convertible currencies.
The U.S. was fetching Z$500,000 on the parallel market on Tuesday compared with Z$40,000 to Z50,0000 in May - in effect a tenfold depreciation. The Reserve Bank of Zimbabwe recently reset the official rate to Z$30,000 from just Z$250, though most economists said the move was too little of an adjustment to make a difference.
Transport costs in Harare and most rural areas have doubled recently while the cost of food keeps rising. A a loaf of bread goes for Z$150,0000 on the parallel market though the official price is Z$30,000. A 10-kilogram bag of maize meal - Zimbabwe's staple food - sells for Z$500,000 – ten times the official price of Z$50,000.
Few firms are maintaining output, as they are losing money at state-imposed prices.
Independent economic consultant Bothwell Deka told reporter Blessing Zulu of VOA’s Studio 7 for Zimbabwe that the scarcity of foreign currency is hitting businesses hard.
Meanwhile, South African Reserve Bank Governor Tito Mboweni said Tuesday that the erosion of property rights in Harare has been one of the causes of the country's economic crisis. Mboweni was giving a a lecture at Rhodes University.