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Govt debt doubles in 15 days
Paul Nyakazeya, The Zimbabwe Independent
September 22, 2006

http://www.theindependent.co.zw/viewinfo.cfm?linkid=12&id=7357

ZIMBABWE’S domestic debt this month doubled in a space of less than 15 days, touching an all-time high of nearly $130 billion or $130 trillion under the recently phased out currency system, latest figures from the Reserve Bank of Zimbabwe revealed.

The debt opened the month at $64 billion, reaching $97 billion within seven days before scaling to $127 billion on September 15.

The high debt level raised fears that inflation, blamed by critics on government spending, would accelerate to unprecedented levels during the year.

The International Monetary Fund last week said that inflation would average 1 200% this year, and 4 000% next year, indicating that it could breach the 5 000% level next year.

Inflation, which had eased during the months of June and July to levels just over 900%, made an extraordinary surge in August to touch an all-time high of 1 204,6%.

The biggest component of the debt was in interest payments, amounting to a hefty $81 billion or 64% of the debt.

The interest payments were for treasury bills, most of which were issued to the market at rates of between 500% and 525%.

The principal Treasury bill debt amounted to $45 billion, or 35% of government debt.

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