"Zimbabwe’s fixed and unsound foreign exchange rate policy aids corruption and in turn feeds the hyperinflation. A simple example will clarify the point. Assuming one approaches the RBZ and accesses US$1000 at the official rate of US$1: Z$30,000, it means you pay the RBZ Z$30 million. Then you walk across the city to Fourth Street or take the US$1,000 to Road Port and you meet one of the RBZ’s runners who offers you a rate of US$1: Z$4,000,000.
So, for your RBZ-sourced US$1,000 you get a whooping Z$4 billion. Magic! So within one morning, Z$30 million becomes Z$4 billion. Since this is a sweeter than honey, at around 2PM you rush back your suitcases of bearer (or is it burial?) cheques to the RBZ and buy more forex. This time around, you are loaded with Z$4 billion, which can buy you a massive US$133,000. And by now, from a mere millionaire in the morning, you are now in a respectable neighbourhood with Z$533 billion (US$133, 000 times Z$ 4,000,000)."
"The official exchange rate is 285,000 Zimbabwe dollars to one US dollar. On the parallel market, one US dollar fetches 1.6 million ZWD."
"This time last year we were still dealing in Zimbabwe dollars - worthless paper in denominations of billions and trillions which had expiry dates. We were queuing outside banks for days at a time to be allowed to withdraw miniscule amounts of our own money. Amounts that weren't enough to even buy a bar of soap or a cup of tea. This dreadful time is also now a thing of the past and the banks are deserted places because most people don't have enough money to save and don't trust the banks who so recently treated their customers and their life savings with such casual contempt.
The reality of life in Zimbabwe this October 2009 is that the basics are back: food, fuel and bank notes."
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