Dollar drops as demand soars

HARARE - The Zimbabwe dollar has plunged yet further as a result of high importer demand and locals seeking hard currency as a hedge against rampant inflation.
By close of business on Monday, one US$ traded for Z$3,200 and one British Pound for Z$5,300, while one South African Rand fetched Z$390.

The Zimbabwean dollar was pegged at 250 to the US$.
“There are huge pressures on the dollar already,” said one market analyst here. “Companies have reopened and a lot of importers have come on to the market to buy foreign currency and there have been some speculation on the dollar.”
Charles Gurney, a leading market analyst said: “There appears to be no end in sight at this stage.”
Analysts said Monday the dollar could fall further given the level of import cover.
“The Reserve Bank needs to do quite a lot, as they also appear to be confused just as we are,” said an economist with a leading financial house.
Economic consultant John Robertson said there was widespread expectation in the market that Reserve Bank governor Gideon Gono would devalue the exchange rate significantly when he presents his monetary policy review in two weeks time.
In its latest analysis, economic research and consultancy firm, Techfin Research forecast Zimbabwe’s embattled domestic currency’s fair value by December last year at $814.15 to the US dollar, against the fixed $250 to the greenback pegged by the central bank since August last year.
Techfin further noted that the hapless Zimdollar would race to a “fair value” of $1,058.39 to the US unit this month and close 2007 at a massive $16,588.73 to the US dollar.
Techfin’s projections are in tandem with forecasts made by the IMF last year predicting inflation to top 4,500 percent this year with the Gross Domestic Product shrinking 4,7 percent.

Post published in: News

Leave a Reply

Your email address will not be published. Required fields are marked *