THE Zimbabwe dollar remained defenceless against mounting hyperinflationary pressure, losing significant ground against major currencies on a thriving parallel market that has become the benchmark for
commodity pricing in the country.
The currency was this week quoted at above $500 000 to the greenback, from $450 000 last week, well above the inter-bank rate of $101 195, 54.
Parallel market dealers were quoting the British pound at around $810 000, from $750 000 last week.
They said the rate was even higher on large volumes.
On the official market the Zimbabwe dollar is trading at $187 586 to the British pound.
Dealers said the rate for the pound could reach $1 million before the end of the third quarter in a tightly-short market.
Zimbabwe is currently going through its worst economic crisis in history, characterised by acute foreign currency shortages as well as shortages of basic food commodities.
The impact of the foreign currency crisis has been the shortage of fuel as well as failure to import critical capital equipment by industrial operations, resulting in low productivity which has in turn worsened the foreign currency situation due to low exports.
The tobacco selling season, which was widely expected to usher in an improvement in foreign currency inflows has failed to make an impact.
Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono is expected to devalue the local currency or adopt measures that could allow the currency to depreciate on the interbank market when he presents his monetary policy review next week.
Economic consultant, John Robertson, said Gono was unlikely to stop the parallel market, but warned that the parallel market would continue to stoke inflation due to its impact on the pricing of goods in the country, mainly those with import components.