A large group of disgruntled soldiers went on a rampage in the capital
a week ago, attacking foreign currency dealers, traders, breaking
windows and looting shops. The attack, which saw the uniformed group
clash with military police officers, led to the arrest of at least 16
soldiers.
But by the end of the week, the government moved in to pacify the
growing unrest among its once dependable and loyal group of uniformed
thugs, and paid out cash sums to both soldiers and police officials –
with police members each receiving Z$100 million and soldiers receiving
half of that.
The government's reckless spending to keep its security forces in check
and keep itself in their favour came at the same time that cash
withdrawal limits were increased from Z$500 000 a day to Z$100 million
per week, on Thursday. At the same time, new bank notes were once again
introduced into the market on Friday as part of the Reserve Bank's
absurd method of dealing with runaway hyperinflation.
The combined weight on the local economy this weekend saw the dollar
crash to record lows, with the currency reportedly halving in value
every five to ten minutes on Friday. The spectacular crash sent the
prices of basic foodstuff rocketing upwards – to the point that the new
weekly withdrawal limit will only buy three loaves of bread at the new
value of Z$35 million per loaf.
Independent economic analyst, John Robertson explained on Monday that
the local dollar's rapid fall was the direct result of last week's
improved access to cash'. He described that by Friday, the day after
the withdrawal limits increased, the dollar was trading at Z$10 million
to US$1. Robertson added that while the prices of goods in foreign
currency are unlikely to shift much given the stability of the US
dollar, he said the skyrocketing prices of goods in local currency was
expected – if you can find a shop that will sell to you in local money.
SWRAdio Africa
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