Zimbabwe Prices In Stratosphere As Political Power-Sharing Falters
Consumers can only withdraw Z$500,000 from their bank accounts - but some try to beat the system by presenting bogus invoices from fune
Zimbabwean consumers are blaming the breakdown in the political power-sharing process for a major surge thisweek in prices of basic goods and services. A loaf of bread nowcosts around Z$400,000, double last week's price of Z$200,000. Two kilograms of sugar cost Z$1 million and a kilo ofmaize meal, Zimbabwe's staple food, goes for one U.S. dollar or Z$400,000 at the current parallel market exchange rate. However, in the frenzied market in transactions carried out by check, someone holding a U.S. hundred dollar bill could receive Z$5 quadrillion - a five followed by 15 zeros. Speculators call such transactions "burning money," using checks in far-fetched amounts to buy, for instance, phone cards which they sell on the street for scarce cash notes. Consumersare only allowed to withdraw Z$500,000 from their bank accounts, but as financial institutions allow larger withdrawals for emergencies, those trying to beat thesystem present bogus invoices from funeral homes pleading thenecessity of more cash for a burial. Others have tried the more direct expedient of bribing bank tellers. Such extreme financial measures are driven by hyperinflation. The annual rate of increase in the cost of living was last officially measured at 231 million percent. But the prominent U.S. economist Steve Hanke recently pegged it at 2.79 quintillion percent.