THE Zimbabwe dollar has continued to depreciate in 2024, with traders in some areas now refusing to accept the local currency, while parallel market exchange rates have been differing across the country, a snap survey by The NewsHawks has shown.
NHLANHLA SIBANDA
This has been happening amid fears of renewed hyperinflation. Latest statistics by United States-based applied economics expert Professor Steve Hanke using his own measure have shown that Zimbabwe now has the highest annual inflation in the world pegged at 1 347%, while month[1]on-month inflation is pegged at 34.8%.
Findings by The NewsHawks survey in Makonde rural district have shown that traders are not accepting the local currency, saying that it makes it difficult for them to restock on goods. Other retailers cried foul over the volatility of the local currency.
“I do not accept payments in local currency because exchange rates are always changing ev[ery day. Thus, I restock from Harare and I do not travel to Harare regularly. It is either once or twice a month, therefore if I accept local currency payments, by the time I travel to Harare for restocking, the money would have lost value,” said Nelia Kuziva, a trader.
Some retailers in Murewa have also been refusing payments in local currency. For instance, at Chigori Farm township in Murewa district, Mashonaland East, informal traders said the local currency does not have value in the area.
The NewsHawks’ survey also revealed that informal sector exchange rates are differing in various places across the country.
For instance, while in Harare US$1 is equal to ZW$4 000 for cash and ZW$12 000 for electronic payments, the same is pegged at ZW$5 000 for cash payments and US$14 000 for electronic payments.
Bulawayo, on the other hand, has been using South African coins to ramp up the depreciating currency, with US$1 equal to R17, or ZW$14 500 for electronic payments.
The local currency has been in freefall since last year, shedding record values against the greenback in 2023.
In the third quarter of 2023, the Zimbabwe dollar continued to weaken, losing 15.7% of its value against the US dollar to close the month of September at US$1:ZW$5 466.75, according to an economic report produced by the Zimbabwe Coalition on Debt and Development (Zimcodd).
In December 2023, economist Dr Prosper Chitambara told The NewHawks the exchange rate is likely to be further pushed by El Niño weather conditions that are likely to see a diminished agricultural output, putting pressure on the local currency.
“The fact that most people have lost confidence, I think that is going to put a lot of pressure, even next year, on the exchange rate. And also, next year, given that there is El Niño, this could result in diminished agricultural production, which will affect pricing, government spending, and imports,” Chitambara said.
