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U.S. dollar still goes far ... filling wheelbarrows in Zimbabwe

Section: Daily Dispatches

Zimbabwe Currency Tumbles
to Record 25 Million to US$1

By Angus Shaw
Associated Press
via Yahoo News
Wednesday, March 5, 2008

HARARE, Zimbabwe -- The Zimbabwe currency tumbled to a record low of 25 million for a single U.S. dollar Wednesday, currency dealers said.

With Zimbabwe dollars mostly available in bundles of 100,000 and 200,000 notes, one $100 note bought nearly 20 kilograms (40 pounds) of local notes at the new market rate Wednesday.

Currency dealers said uncertainties ahead of elections scheduled March 29 and the world's highest inflation of 100,500 percent led holders of hard currency to hang on to their money at the same time as the state central bank pumped more local cash into the market for election costs.

The price of the U.S. currency was also pushed up by central bank buying on the unofficial market to pay for power, gasoline and vehicle imports ahead of the polling, said one black market dealer who could not be identified out of fear of reprisals.

In the economic meltdown, the black market exchange rate for the U.S. dollar broke the 1 million Zimbabwe dollar mark for the first time in late October.

The value of the Zimbabwe dollar weakened steadily against hard currencies throughout last year but its fall quickened dramatically in recent weeks, the dealer said.

With industry and production collapsing, Zimbabweans have become heavily dependent on imports of the corn meal staple and basic goods. Until last year, the former regional breadbasket was self-sufficient in canned and processed foods, household goods, soap, toothpaste, toiletries, and other items now imported from neighbors Malawi, South Africa, and Zambia and from as far afield as Egypt, Germany, Iran, and Malaysia.

According to latest official poverty line data, an average family of five needs a monthly income $35 to survive while remaining living in poverty.

But most general hands and other lower-paid workers earn less than the equivalent of $10 a month in an economy also suffering record formal sector unemployment of 80 percent.

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