Zimbabweans have been pushed deeper into economic misery as the local currency continues on a free fall, pushing prices of basic commodities and services beyond the reach of most poor families. High annual headline inflation rates remain prevalent in Zimbabwe due to increased fertilizer and fuel prices leading to reduced agricultural yields thus contributing to food inflation which continues to be over 10%. According to the Zimbabwe National Statistics Agency (ZIMSTAT), the Total Consumption Poverty Line (TCPL) rose from ZWL$ 95,462.53 in September to ZWL$ 105,072 in October for one individual. The Food Poverty Line (FPL) for one person in October 2023 was ZWL$ 80,152.32 from ZWL$ 73,235.85 in September 2023.

Employees have witnessed an erosion of their salaries as the economy continues on a tailspin. Businesses and service providers are forward pricing to hedge against losses as the local currency loses value on the market.

To succumb to this rapid change, on 27 October 2023, the Zimbabwean Government allowed for the settlement of transactions and payments for goods and services in foreign currency until 31 December 2023. 

This decision to extend the multi-currency system was influenced by the following:

• The Interaction with the IMF – whereby it warned the Zimbabwean Government about the risks of having a mono-currency system without reserves and confidence in the financial system.

• Fast-depleting levels of USD cash in the formal sector. Recently, banks stopped providing loans in United States Dollars (USD) due to concerns about what happened in 2019. During that time USD bank balances were converted to Zimbabwean Dollars with authorities claiming they had the same value as the USD. 

• Inconsistent monetary and fiscal policies have made foreign investors hesitant to invest as they are concerned that they won't be able to take their profits back to their home countries or that their profits will be reduced by high inflation.