Exchge Rate Update

Sent out 4 October 2008

Despite Reserve Bank re-affirmations that its suspension of RTGS and inter-bank transfers still apply and that cheque clearing procedures are quick and efficient, the recent policy impositions continue to create havoc and the rates of change in the various currency markets continue to accelerate. The Zimbabwe dollar has become virtually unusable and most of us cannot get our hands on them anyway, so the rates to the US dollar are becoming more important by the day.
I have updated the table sent to you previously as best I can. In the lower pportion of the table my percentage changes against the more-or-less equivalent days of one month earlier will offer a reasonable guide to the monthly inflation rate, so we might be looking at figures of around 9 000 to 10 000 for September and well above 20 000% for October, so far. Like it or not, we are "dollarising" fast.
As for forecasts, I hope the additional table that shows the month-end parallel market exchange rates compared to their equivalents last year will be helpful. The forecasts in the shaded portion for the last quarter are based on the assumption that the average daily rate for the last few months persists for the next few. The 228 quadrillion percent shown for December will, if it is reached, earn for Zimbabwe several unflattering mentions in the Guiness Book of Records.
RBZ is slow to update the inter-bank rates. Perhaps, at last, they are a source of embarrassment?

My best wishes through the coming uncertainties.

Kindest regards,

John