Zimbabwe Slash Currency In Bid To Turn Economy Around

Zimbabwe has today announced its decision to devalue its currency in a bid to help reverse the desperate economic situation in the country.

From today, the Zimbabwe dollar is now valued at 30,000 to one US dollar, whereas the previous rate stood at just 250 dollars to one US dollar. However, many suggest that currency on the black market is significantly less worthy, with 250,000 dollars buying one US dollar.

The Zimbabwe economy has been ravaged by the highest rate of inflation in the world - officially standing at 7,634% according to the Zimbabwe government. However, the International Monetary Fund have warned that inflation could jack up to 100,000% by the end of this year, which would bring a humanitarian emergency to the area.

Estimates have counted three million citizens that have left the country to neighbouring countries as a result of the economic conditions. With unemployment at a record 80%, the population is struggling to generate wealth and kick start any economic recovery.

Additionally, with supermarket shelves completely bare and businesses struggling to afford to import raw materials, the Zimbabwe economy is at rock bottom, despite the fact that it was once considered to be one of the only stable economies in the southern African region.

Just last month the Zimbabwe government launched its 200,000-dollar note in a bid to calm down the inflation that has caused so many problems for the economy, paving the way for today’s devaluation.

Leader President Mugabe also decreed as law a freeze on any price or wage increases, with a criminal penalty for those that break the law. However, this kind of harsh measure is unlikely to have any positive effect on the economy or the current predicament, with one analyst likening it to trying to ‘reverse the laws of gravity’.

Story link: Zimbabwe Slash Currency In Bid To Turn Economy Around