Government responsible for fall of dollar


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The freefall of the Zimbabwean dollar continued with the local currency plunging to about $4 000 to the greenback by the end of July. Market watchers attribute the decline to the government’s appetite for foreign currency.

The government is financing petrobills and agribonds largely from foreign currency bought on the parallel market. It has been seeking $60 billion for the importation of fuel though it has deregulated the fuel industry.

The government is heavily subsiding public transport by selling petrol for $450 a litre and diesel for $200 a litre when they are trading at $1 600 and $1 300 on the open market.

The government is also seeking funds to boost agricultural production following its massive land reform programme. Farmers need about $600 billion but the government can only fork out $100 billion

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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