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Zimbabwe Prices In Stratosphere As Political Power-Sharing Falters

Zimbabwean consumers are blaming the breakdown in the political power-sharing process for a major surge this week in prices of basic goods and services.

A loaf of bread now costs around Z$400,000, double last week's price of Z$200,000. Two kilograms of sugar cost Z$1 million and a kilo of maize meal, Zimbabwe's staple food, goes for one U.S. dollar or Z$400,000 at the current parallel market exchange rate.

However, in the frenzied market in transactions carried out by check, someone holding a U.S. hundred dollar bill could receive Z$5 quadrillion - a five followed by 15 zeros.

Speculators call such transactions "burning money," using checks in far-fetched amounts to buy, for instance, phone cards which they sell on the street for scarce cash notes.

Consumers are only allowed to withdraw Z$500,000 from their bank accounts, but as financial institutions allow larger withdrawals for emergencies, those trying to beat the system present bogus invoices from funeral homes pleading the necessity of more cash for a burial.

Others have tried the more direct expedient of bribing bank tellers.

Such extreme financial measures are driven by hyperinflation. The annual rate of increase in the cost of living was last officially measured at 231 million percent. But the prominent U.S. economist Steve Hanke recently pegged it at 2.79 quintillion percent.

Consumer Alice Mutengu of Harare told reporter Jonga Kandemiiri of VOA's Studio 7 for Zimbabwe that many people have felt themselves compelled to engage in illegal activities because of the desperate economic situation in the country.

More reports from VOA's Studio 7 for Zimbabwe...