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Zimbabwe in rush for hard currency

Alex Duval Smith Africa Correspondent
Thursday 28 June 2001 00:00 BST
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A rush for hard currency was reported on Zimbabwe's black market yesterday after the country's central bank introduced drastic measures to pay its fuel and electricity debts.

A rush for hard currency was reported on Zimbabwe's black market yesterday after the country's central bank introduced drastic measures to pay its fuel and electricity debts.

The central bank said exporters will be compelled to exchange 40 per cent of their export proceeds for Zimbabwe dollars. Previously they were allowed to keep 75 per cent in hard currency to import spare parts, fertiliser and machinery.

Kevin Butler, manager of CFX Foreign Exchange in Harare, said: "The black market on the streets has taken off in the last couple of days because people are anticipating an ever-growing shortage of foreign exchange.''

He said his company trades at the official rate of 78 Zimbabwe dollars to the pound but that the black market was offering Z$200 to the pound.

Amid a deepening economic crisis, worsened by a recent drop in confidence in President Robert Mugabe's government, Zimbabwe has accumulated huge debts. A 70 per cent fuel price increase two weeks ago was intended to help alleviate the debts of the National Oil Company. Bus fares have more than doubled and the Zimbabwe Congress of Trade Unions has threatened a two-day stayaway from work next week.

Last week, British Telecom, imposed restrictions after the state telephone company failed to pay arrears of about £8m.

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