Zimbabwe Business Watch : Week 46
It is more of the same this week but with accelerating depreciation and rapid price increases as businesses would rather risk punishment than go under. The Old Mutual Implied Rate has soared above the Market Rate by up to 100%. It now stands at ZD$2,856,000 to the US$. This rate is the result of dividing the Zim Dollar Old Mutual Share Price on the ZSE by the Rand price on the JSE and using the R/US$ cross rate.
Generally speaking, there are areas of productive capacity which are increasing utilization either through crude price controls or by adopting a convenient interpretation of these chaotic and ambiguous regulations. Beverages appear to be slowly making their way back onto the shelves but most food items remain scarce, particularly the staples of mealie meal, sugar, bread, meat and so on. Recent NEC wage awards have come at a bad time for commerce and industry as it is in the midst of a period when business is on its knees struggling to stay afloat.
“Dollarisation” is taking its grip on day-to-day retail transactions and this is even beginning to creep more and more into bigger business dealings. Increasing numbers of companies are running their businesses on a Rand or US$ basis in order to gain better control of their operations through more realistic presentation of figures. Using ZD$ for this purpose is simply a waste of time.
November 14th, 2007 20:32
What is happening in Zimbabwe is just unimaginable. It needs to be addressed and people need to start taking action. It can’t go on like this forever. Every time I think that it can’t get any worse than it already is, it does. We should all get out there and say something or let people know about the beautiful country that is Zimbabwe.