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Zimbabwe: Zimbabwe Dollar Hits 1,2 Trillion Against the UK Pound
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SW Radio Africa (London)
21 July 2008
Posted to the web 21 July 2008
Lance Guma
Zimbabwe's economic decline was emphasized Monday when its currency slumped to an all time low of trading 1 British pound to Z$1,2 trillion.
With inflation officially at 2,2 million percent but unofficially over 10 million percent, the Reserve Bank responded by introducing a Z$100 billion dollar note. But a loaf of bread alone is costing more than Z$100 billion, in an economy that is beset by crazy contradictions. Teachers and other civil servants are earning around Z$140 billion a month, just enough to buy two packets of potato crisps.
It was only in January this year that a $Z10 million note was issued. That was quickly followed by Z$50, Z$100 and Z$250 million dollar notes, meant to stave off cash shortages in the banking sector and allow for easier transactions. But it has only taken a couple of months to move from million dollar notes to billion dollar ones. While the regime has done its best to blame so-called 'western sanctions,' economists say the printing of money in an economy that is not producing anything has fuelled the hyper-inflationary environment.
Over eighty-percent of the population is living below the poverty threshold, with millions thought to be facing starvation, following the banning by government of aid distribution by NGO's. Most people in formal employment are having to sell goods and services on the side to supplement their incomes. One teacher interviewed said teachers are selling sweets to their students to supplement their meager wages, in violation of Ministry of Education rules. Not surprisingly there are rumours that soldiers have just been awarded trillion-dollar salaries, although it's impossible to find out if this is correct.
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Meanwhile the signing of a memorandum of understanding between the MDC and Zanu PF on Monday brought mixed reactions on whether the country's economy could soon turn a corner and improve. With promises of massive investment if the political situation does improve many Zimbabweans were hoping their suffering might be a thing of the past. Those who are skeptical feel that Mugabe is using the MDC to get legitimacy for himself, and the situation will only change for those at the top while ordinary people's suffering continues.
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