Inflation goes through the roof
Tuesday, May 6th, 2008Last week Gono announced a new monetary policy. This week there is chaos.
I am not an economist so can only try to explain in my own layperson terms what is currently going on. Maybe someone with a better understanding of this can comment.
Gono’s monetary policy has given the banks authority to purchase foreign currency at a rate determined by “demand and supply”. The banks are then to remit the money at the end of each working day to the Reserve Bank of Zimbabwe (RBZ). The reason for this, I assume, is an attempt to gain control of the blackmarket. The result is that they have basically re-legalized the dealing of foreign currency by allowing the banks to trade in it.
The immediate impact is mindblowing. (more…)









