US embassy cable - 03HARARE1578

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Identifier:	03HARARE1578
Wikileaks:	View 03HARARE1578 at Wikileaks.org
Origin:	Embassy Harare
Created:	2003-08-06 11:57:00
Classification:	UNCLASSIFIED
Tags:	ECON EINV PGOV ZI
Redacted:	This cable was not redacted by Wikileaks.

UNCLAS HARARE 001578 
 
SIPDIS 
 
STATE FOR AF/S and AF/EX 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
USDOC FOR 2037 DIEMOND 
PASS USTR FLORIZELLE LISER 
TREASURY FOR ED BARBER AND C WILKINSON 
STATE PASS USAID FOR MARJORIE COPSON 
 
E. O. 12958: N/A 
TAGS: ECON, EINV, PGOV, ZI 
SUBJECT: Zimdollar Tumbles Further 
 
 
1. Summary: The Zimdollar has fallen another 25 percent 
from Z$3350 to 4200:US$1.  End Summary. 
 
2. In early May, the Zimdollar still traded at 
Z$1450:US$1, so the three month devaluation stands at 
around two-thirds.  While a number of factors are 
weakening the Zimdollar, oil parastatal NOCZIM has been 
aggressively selling 91-day bonds and converting the 
proceeds into U.S. dollars for fuel purchases.  (Even so, 
NOCZIM is only supplying subsidized fuel to the GOZ's own 
vehicles and some commuter vans.)  The largest Zimbabwean 
note is now worth 12 US cents.  A Z$ 1 coin, still widely 
circulated, exchanges for US$.0002.  If you carry 42 of 
these bulky coins in your pocket, you have one US cent. 
 
3. Comment: Through accelerating inflation and a 
weakening Zimdollar, the GOZ is confronted with its 
failed economic policies.  The Zimdollar has nearly 
fallen below the Zambian Kwacha, currently trading at 
4560:US$1, a psychological barrier for a country that 
once looked down its nose at poorer neighbors. 
 
Whitehead