23 october 2008
Exchange rate movements have been accelerating in the past few days and I offer this attached table with some concern as it is likely to be rendered out of date within hours rather than days. However, the history of the collapse might be of interest. You will see that a US dollar now costs close to three billion Zimbabwe dollars if you work through the Old Mutual share price, and that has moved a thousand-fold in about eight working days. So the landslide is turning into an avalanche! The sharp movements are not always mirrored immediately by the changes in other rates, but as the record shows, the OMIR has often become a good leading indicator.
While power-sharing talks continue to be confounded by contrived confusions, not one of the efforts in the political arena has drawn attention to the mayhem in the productive sectors or the banking industry. The Zimbabwe dollar is virtually unobtainable in the numbers needed to transact even the most basic business, so it has rapidly fallen from use and most traders are opting for foreign exchange whenever they can.
The total lack of concern being shown by the authorities for the plight of ordinary people appears to stem from the official beliefs that the people have brought their hunger and poverty upon themselves. This they did by not making full and productive use of all the resources transferred to them through the various confiscation and redistribution processes that government has been so generously administering for the past few years.
I hope the table is useful. I will send a further up-date as soon as I can assemble a figures for a few more days.