Monday, December 1, 2008

Report from Jonh Robertson

With regret, but not much surprise, I am finding that the exchange rate numbers are becoming less convincing and more erratic. Disruptions caused by Dr Gono's misplaced attacks on the banks and the stock exchange might take time to settle, but other events are overtaking even the basics of finding money. Water supplies have dried up everywhere in Harare and factories are forced to send staff home. Some hotels, many schools and most of the city centre high rise buildings have become unsafe places to work and demonstrations are said to be in an advanced stage of planning. Cash allowances from the banks are being stepped up appreciably and will hopefully permit the currency to regain at least a little functional value, but inflation seems certain to make that a temporary benefit at best.

However, I hope that the attached exchange rate table will help you to keep track of the recent changes. The visible parallel market is barely functioning, but the heightened uncertainties appear to have prompted increased caution among dealers who are still handling requests. However, all the signs suggest a greatly reduced level of demand as the Christmas shut-down approaches. For many, the water situation has already brought the date forward and many of the businesses will be looking for firm assurances from all the different utility suppliers before they make plans to re-open.

Kindest regards,

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