Zimbabwe Business Watch : Week 23
June 7th, 2008
Business began the week in a state of shock as the USD moved from 500 million to one to 1,300: 1 in the past few days effectively forewarning the country of even more massive inflation.
Whilst dollarisation is not permitted, more and more businesses are beginning to behave in such a manner albeit that Zim dollars remain the official currency.
The sheer volume in transactions is becoming an obstacle in itself and month on month inflation has passed the 300% mark with annual inflation predicted to pass 3 million % in June.
The recent hike in import duties through the mechanism of the Customs Rate of Exchange, has also provided a further spurt in the rise of costs.
The Hard Boiled Egg Index is sitting at 840 million, a little above the Old Mutual Implied Rate. However, as the rate accelerates, the gap between rates tends to widen.
