Zimbabwe Update: 9,000% and the Fishmongers Group

Every time I wonder what is going on in Zimbabwe and if Robert Mugabe could possibly be screwing things up even worse than he has already, I read a story like this:

Zimbabwe currency crashes; inflation as high as 9,000%
HARARE, Zimbabwe (AP)—The value of the Zimbabwean dollar suffered its worst crash in memory, dealers said Thursday, sparking a run on dollars and forcing stores to close early to put new prices on their meager stock. Black market exchange rates—fueled by the central bank buying at the illegal rates to pay the mounting debts of crumbling state fuel and power utilities—rose to upward of 300,000 Zimbabwe dollars to one U.S. dollar in large offshore deals, said one trader. The official exchange rate is 15,000-1.

“It’s gone crazy,” said the trader, who spoke on condition of anonymity because his dealings are illegal. “People are holding out for the highest bidder and mentioning as much as 400,000-1 which could be tomorrow’s price. It’s changing by the hour.” The going rate doubled since Monday, he said.

In local deals, the U.S. currency fetched at least 140,000-1 in cash and around 200,000-1 in electronic bank transfers. Shortages of Zimbabwe bank notes created the premium on bank transfers, said the illegal dealer.

Zimbabwe has the world’s highest rate of inflation, estimated officially at around 4,500 percent but calculated by independent finance houses at closer to 9,000 percent.

An inflation rate listed as several thousand percent sounds crazy. What does it mean in practice?

• A hardware store in northern Harare closed its doors Monday through Tuesday to re-price all its goods.
• Supermarkets and other shops are planning to shorten opening hours to make price changes, enabling them to buy replacement stock at higher prices.
• One journalist reported that she had returned home from a week in South Africa to discover that during her absence the price of beef had increased 2.5 times, a bottle of cooking oil had doubled and bus fares had gone up between three and fivefold.
• The few workers who can afford the fuel to get to work are demanding higher wages.

Zimbabwe’s official media has also alleged that there is a “secret plot” by Western countries to undermine the economy, and this group is called the Fishmongers Group by the government. According to the fiercely pro-Mugabe government media, the so-called Fishmongers Group was “working overtime to destroy the economy, mutilate the Zimbabwe dollar, foment civil unrest and then dangle a rescue package to win the support of gullible politicians.” A pro-Mugabe article asserting such a plot can be read here. Although it doesn’t answer the more pressing question—where does that name comes from?