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Surging Inflation: Zimbabwe Dollar Is The Worst Performing Currency In The World

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John MangudyaPhotographer: Christopher Goodney/ source: Bloomberg.com

Surging Inflation Forces Central Bank to Adjust Zimbabwe Target

Zimbabwes central bank is revising its inflation forecast upward after annual price-growth surged to more than 100% this month.

Factors including shortages of everything from corn to cooking oil stoked by the war in Ukraine, rising fuel prices and domestic exchange-rate volatility are reasons to adjust the outlook, Reserve Bank of Zimbabwe Governor John Mangudya said in a phone interview Monday. The bank said at the start of 2022 it expects inflation of 25% to 35% by year-end.

“We are doing a recalibration of the numbers,” he said. “We are concerned with inflation going up like any other country in the world.”

He declined to specify what the new year-end forecast will be.

Zimbabwe’s annual inflation rate jumped to 131.7% this month — the highest in 10 months — from 96.4% in April, as food prices almost tripled. The increase has been fueled by a sharp depreciation in the Zimbabwe dollar that spurred authorities to use a variety of strategies to stem its decline, including a 10-day ban on bank lending.

The Zimbabwe dollar is the worst-performing currency in the world. It officially trades at Z$290.89 per US dollar, having weakened 63% against the American currency so far this year.

Zimbabwe's inflation rate surged in May as the currency weakened

The recent convergence between the official exchange rate and an interbank rate that the government has permitted businesses to use for commerce is “a good move” meant to remove arbitrage opportunities, Mangudya said. The interbank rate is at Z$299.68 per U.S. dollar, according to data available Monday on the central bank’s website.

The governor also expects the parallel market rate of Z$400 per U.S. dollar to remain “stable” given the measures announced by authorities to stabilize the economy including the use of the interbank rate in most transactions, a freeze on money supply growth and allowing citizens to import basic goods.

A gap of 20% between the interbank and parallel market rates is acceptable, though authorities are monitoring it closely, according to Mangudya.

“Anything above that causes inflation,” he said. “The very idea of parallel means side by side. If it’s running away from the other, it can no longer be parallel.”

Source: Bloomberg.com

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AU official calls out Germany over leopard jibe that left some offended

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A Leopard 2 tank is pictured during a demonstration event held for the media by the German Bundeswehr in Munster near Hannover, Germany, Wednesday, Sept. 28, 2011. - Copyright © africanews Michael Sohn/AP2011

Germany apologized on Thursday (Jan. 26) for using a leopard emoji in a tweet refering to the Russian Foreign Minister’s visit to Africa. The post that was regarded as offensive by some users was called out by the spokeswoman for the African Union chairman Chairman Moussa Faki Mahamat.

The German foreign ministry attempted to poke fun at Russia’s top diplomat during his tour of Africa when it tweeted that he wasn’t there looking for leopards, but using the trip to try and justify Russia’s full-scale invasion of Ukraine.

The tweet, and the leopard emoji the foreign ministry used on its official account, apparently sought to play off Germany’s decision to send some of its advanced Leopard 2 tanks to Ukraine to back its military fight off Russian forces.

An African Union official questioned the use of emoji, pointing it could be interpreted as the continent being portrayed once again as only about wild animals.

Ebba Kalondo, the spokeswoman for AU Chairman Moussa Faki Mahamat, tweeted back to the German government account questioning if Africa, its people and its wildlife was “just a joke to you?”

“Foreign policy is not a joke nor should it be used to score cheap geopolitical points by illustrating an entire Continent with colonial tropes,” Kalondo wrote in a follow-up tweet.

The German foreign ministry apologized and said that the tweet wasn’t meant to offend, but rather “to call out the lies that Russia uses to justify its imperialist war of aggression against Ukraine.”

Lavrov has visited South Africa, Eswatini, Angola and Eritrea this week, where he has repeated his claims that the United States and its Western allies are using Ukraine as a tool in a “hybrid war” against Russia.

Many African nations hold historical ties with Moscow. South Africa was one of several to abstain from a U.N. vote last year condemning Russia’s invasion of Ukraine. Eritrea voted against the resolution alongside Russia, Belarus, North Korea and Syria.

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Bomb injures at least a dozen people near a market in north-eastern DR Congo

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Congolese Defense Forces soldiers inspect the scene of an attack near the town of Oicha, 30 kms (20 miles) from Beni, Democratic Republic of Congo, Friday July 23, 2021.

A bomb exploded at a market in eastern Congo on Wednesday (Jan. 25), injuring at least a dozen people, authorities said.

An unknown person detonated a bomb inside a bag in North Kivu’s Beni town, said Tharcisse Katembo, a local official.

“Damage was documented (and) at least 12 people were injured. They were injured in the lower limbs, others in their upper limbs and others were hit in the head,” he told reporters in Beni.

The victims were taken to the hospital and an investigation was underway, Katembo said.

No one claimed responsibility for the bomb. However, attacks by the Allied Democratic Forces, which is believed to be linked with the Islamic State extremist movement, have been increasing in North Kivu, according to the United Nations.

Deadly violence

Earlier this month, at least 14 people were killed and dozens injured in an attack on a church in Kasindi town, which was claimed by Islamic State. It said in its Aamaq news outlet that it planted an explosive device inside the church and detonated it while people were praying.

Since April, attacks by the Allied Democratic Forces have killed at least 370 civilians, and the group has abducted several hundred more, including a significant number of children, the U.N. says.

The explosion Wednesday (Jan. 25) occurred in a local market next to a cassava mill, witnesses said.

Danny Syaghuswa, 16, said he was sitting on his motorcycle when a man in a striped shirt put a small bag behind a door, saying he would come back for it, according to an interview with local reporters heard by The Associated Press. “Less than five minutes after he left the bomb exploded,” Syaghuswa said.

Images of the attack circulating on chat groups show people lying on the floor. One woman in blood-stained clothes was carrying a small child.

Violence has wracked eastern Congo for decades as more than 120 armed groups and self-defense militias fight for land and power. Nearly 6 million people are internally displaced, and hundreds of thousands are facing extreme food insecurity, according to the United Nations.

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Somalia: Al-Shabaab terrorists storm mayor’s office, killing six

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Al-Shabaab terrorists set off a bomb and stormed a government building in Somalia’s capital Mogadishu.  The Al-Qaeda-backed terror group has stepped up bombings in the country.

At least six people were killed on Sunday in an attack by Al Shabaab militants at the mayor’s office in central Mogadishu, police said.

A suicide bomber set off a huge blast that tore through building near the office complex with gunfire erupting afterwards, Somali police spokesman Sadik Dudishe said at the end of the four-hour siege.

“All the six attackers died. Five of them during the fire exchange with the security forces and one of them detonated himself,” Dudishe told reporters.

“Six civilians also died during the attack and the situation is back to normal.” All the staffers at the mayor’s office were rescued, the police added.

Al 0Shabaab, a militant group allied with Al Qaeda claimed, responsibility for the attack via its communication channels, saying its fighters “made their way inside the targeted building after killing the security guards.” Witnesses said the initial explosion damaged nearby buildings and gunfire could be heard in the vicinity of the mayor’s office.

The area was quickly cordoned off by security officers, a witness who runs a business near the offices said.

Another witness, Omar Nur, said he was inside a nearby mall when the explosion went off and “was lucky to have escaped safely.” The Al Shabaab militants have been waging a bloody insurgency against the frail internationally backed central government for 15 years, carrying out attacks both in Somalia and neighbouring countries.

The latest attack comes days after seven soldiers were killed on Friday at a military camp in Galcad, a town in central Somalia about 375 kilometres north of the capital Mogadishu. The US military said the attack — in the Somali town retaken by the army this week — involved more than 100 Al Shabaab jihadists.

“The combined actions by partner forces on the ground and the collective self-defence strike is estimated to have resulted in three destroyed vehicles and approximately thirty Al Shabaab terrorists killed” the US military command for Africa (AFRICOM) said in a statement.

Source: Dawn

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