Zim inflation hits 231m per cent

Inflation in Zimbabwe has hit a new record, soaring twentyfold between June and July to an astronomical 231 million per cent, according to figures released by the Harare government yesterday.

In practical terms, the price of a loaf of bread has now shot up to Z$10,000, when it can be found. The official transfer rate for the currency against the US dollar is 180:1, but on the black market $1 changes hands for Z$8,000.

The hyperinflation is directly caused by the Zimbabwean government printing far more money thus reducing its value. The situation is being worsened by the ongoing deadlock between Robert Mugabe's Zanu-PF party and their partners in the national government, the MDC.

External agencies believe that the economy is in an even worse state. Steve Hanke of the Cato Institute in Washington has developed a model to estimate the figure - as of this week, his calculation showed inflation in Zimbabwe was 2 trillion per cent a year.