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Weekly economic bulletin
Crisis in Zimbabwe Coalition
June 22, 2007

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1.0 Summary of economic highlights

a) Zimbabwean dollar continues to slumber against major currencies

The Zimbabwean dollar continues to slumber on the informal market against major currencies this week. The currency crushed from USD 1 to ZWD $100 000 last week to USD 1 to ZWD 160 000, a marked 60% point depreciation. The weakening of the local currency will stimulate inflationary activities in the formal market. However, in larger offshore deals, the ZWD has been reported to have depreciated to an all time record of USD1 to ZWD 300 000.

b) A wave of price increases by Monday

Prices of basic commodities will be shooting up on Monday 25 June 2007, the Weekly Economic bulletin can reveal. The information filtering from the Confederation of Zimbabwe Industries (CZI) is that the prices of basic commodities will be raising from the current price of ZWD 25 000 per loaf to any price between ZWD 35 000 and 45 000. The local commuter fares will raise from the current ZWD35 000 to 50 000. Cell phone tariffs will be going up from ZWD 700 per minute to ZWD 6000 for Econet and 8 000 for the Netone and Telecel. Text messages will be fixed between ZWD 2000 and ZWD 3000, up from the current charge of ZWD 200.

c) ZESA power cuts a liability

Power cuts are still persistent country wide, as ZESA battles to settle its USD 5 million debt from the Democratic Republic of Congo (DRC). The power cuts are detrimental to both households and firms. The firms report that they are producing below 30% capacity and are suffering additional costs of running generators, powered by scarce fuel, damages in the plant equipment, under utilization of labour and operation equipment. The effects are also evidenced in the health sector as mortuaries are now in a perilous state.

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