Worries and warnings for Zimbabwe’s economy
After a period of deflation, Zimbabwe’s economy is experiencing inflationary pressures again and there are fears that hyperinflation may return
Fund managers in Zimbabwe are shunning monetary assets and opting for real assets amid growing fears that the country’s economy is facing a crisis. Inflationary pressures have been mounting since the central bank introduced bond notes. Their value is at par with the US dollar, the country’s monetary authorities say. It is backed by a US$200m bond facility from the African Export-Import Bank. Prices of goods have been rising since the bond notes were introduced, with most shops setting up a three-tier pricing system — US dollars in cash, bond notes and bank cards. Hard currency normally expedites external bank payments. Bond notes and card payments are accepted grudgingly. The bond currency’s value on the black market, a good gauge of confidence in the unit, is weakening, with some forex dealers on the street discounting the currency. Those seeking to buy US dollars are paying an extra $2 in bond notes for US$100 or a premium of 2%. For groceries, one can pay a premium of up to 5% wh...
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