Situation Update
The value of the Zimbabwean dollar (ZWL) plummeted sharply between May and June, making many products and services priced in ZWL unaffordable for some individuals. During this period, the ZWL devalued by 235%, 335%, and 157% on the auction, interbank, and parallel markets, respectively. Price stability in USD, on the other hand, has cushioned households earning in that currency against ZWL volatility. Those that earn in ZWL are most likely struggling to obtain basic essentials. Although the South African Rand (ZAR), a commonly used currency in the southern parts of the country, strengthened against the USD, the cost of goods and services remained high. These areas may already be stressed as a result of dry conditions that limit agricultural production.
In response, the Government introduced measures aimed to address the currency crisis and improve the economic environment in the country, including the introduction of strict regulation for businesses, removal of duty on basic food imports, and allowance of a market–based exchange rate, which have served to stabilize exchange rate volatility, although the rates remain high.
Post published in: Agriculture