ZIMBABWE, the poster child of hyperinflation, is allowing a free fall in its currency that it’s no longer keen to defend and is instead working on a new exchange rate potentially backed by gold.
The country’s local dollar has weakened against the US dollar every day in 2024, sending the price of a single loaf of bread from Z$6 105 to Z$19 357 in a mere 11 weeks.
Such a loss of purchasing power has historically pushed the central bank to intervene and arrest the slide, but this time, there has been no action.
“They’ve left the exchange rate to go,” said Tony Hawkins, an economist and former professor at the University of Zimbabwe. – bloomberg