HARARE
–
Zimbabwe
said
the
steep
devaluation
of
its
gold-backed
currency
last
month
has
triggered
shortages
of
bread,
sugar
and
other
staples
in
its
formally
regulated
stores,
suggesting
the
country’s
latest
effort
to
stand
up
its
local
unit
is
still
struggling.
“This
is
attributable
to
arbitrage,
as
informal
retail
economic
agents
seek
to
capitalise
on
exchange-rate
differentials,”
Information
Minister
Jenfan
Muswere
said
on
Tuesday.
He
cited
reports
of
hoarding
items
to
sell
in
street
markets
and
other
unregulated
outlets
at
the
higher
unofficial
exchange
rate.
Zimbabwe
devalued
the
ZiG
–
short
for
Zimbabwe
Gold
–
by
43%
on
27
September
after
it
slumped
on
the
unofficial
market
amid
doubts
the
country’s
sixth
attempt
at
a
local
currency
since
2009
would
work.
“Zimbabwe
lacks
fiscal
discipline.
We
spend
more
than
we
earn,”
London-based
fund
manager
Ritesh
Anand
told
Zimbabwe-based
media
presenter
Trevor
Ncube.
“We
fund
that
spending
through
printing.
And
the
printing
ultimately
erodes
the
value
of
the
currency.”
The
ZiG
was
lowered
by
the
central
bank
to
24.4
per
dollar
from
14
per
dollar.
It
was
quoted
at
25.97
per
dollar
on
Wednesday
by
the
central
bank.
But
that
is
still
well
above
the
unofficial
market
of
between
40
and
50
ZiG
per
dollar,
according
to
ZimPriceCheck.com,
a
website
that
monitors
official
and
unofficial
exchange
rates.
The
decline
has
come
despite
the
ZiG
being
backed
by
gold
and
hard-currency
reserves
held
at
the
central
bank.
“You
may
have
the
gold
reserves
but
what
the
central
bank
lacks
is
credibility,”
Anand
said.
“People
don’t
trust
the
currency.”
The
implications
of
that
lack
of
confidence
were
playing
out
on
the
nation’s
streets.
The
widening
gap
between
the
official
and
unofficial
ZiG
rates
is
funneling
business
into
the
informal
sector
of
the
economy,
where
participants
sell
exclusively
in
dollars,
at
the
expense
of
the
formal
sector,
which
has
to
accept
payment
in
local
currency.