Depreciation of Zimbabwe dollar pushes up food prices

The United States Agency for International Development (USAID) reports that the Zimbabwe dollar (Zimdollar) has depreciated sharply against the US dollar, leading to an increase in food prices.

In October, the official and parallel foreign exchange markets traded at Zimdollar 5,700 and Zimdollar 7,600 per US dollar, 6% and 9% higher than in September, respectively. The devaluation also led to the rejection by informal markets of the $50 zloty bill, which is the second highest zloty bill in circulation.

Depreciation of Zimbabwe dollar pushes up food prices

In October, ZWL prices for wheat and bread increased by 25 percent, for maize flour and rice by 20 and 15 percent, respectively, and for sugar and cooking oil by almost 5 percent.

While the majority of households are increasingly trading in the informal sector in US dollars or South African rand, many still rely on formal retail supermarkets with prices denominated in ZWL. This has led some formal supermarkets to start pegging their prices to the US dollar, while payment in Zimbabwean dollars is made using the prevailing interbank exchange rate, which allows for a premium of up to 10 percent.

A concerted effort by Zimbabwean President Emmerson Mnangagwa extended the use of the US dollar from the initial 2025 to 2030.

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