Zimbabwe submits to popular pressure: foreign currencies now legal tender

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Thursday, January 29, 2009

Zimbabwe

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• 14 November 2009: Zimbabwe government allocates US$10 million for relocation of thousands of families near diamond field
• 10 November 2009: Zimbabwe projects 15% average growth over next five years

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Location of Zimbabwe

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Zimbabwe has decided to abandon its currency, the Zimbabwean dollar, in favour of other currencies.

A Z$10 trillion dollar note, currently in circulation

Acting Finance Minister Patrick Chinamasa announced today that Zimbabweans will be allowed to make transactions in other currencies along with the local currency. "In line with the prevailing practices by the general public, [the] government is therefore allowing the use of multiple foreign currencies for business transactions alongside the Zimbabwean dollar," he said, adding that the Zimbabwean dollar will not be removed from circulation and would be used alongside other currencies.

A 100 million dollar note, issued last year (now demonetised)

This decision comes during the current period of hyperinflation, which has massively devalued the Zimbabwean dollar. Banknotes up to $100 trillion have been printed, despite the removal of ten zeroes from the currency last summer to try to make transactions easier. The official inflation rate, last updated in July 2008, was 231,000,000% a year, although independent estimates place the number as high as 6.5x10¹⁰⁸, or 6.5 quindecillion novemdecillion, percent.

Up to now, only vendors with licenses were legally able to accept foreign currencies, although the practice was widespread — private businesses altogether refuse to accept the unstable Zimbabwean dollar.

Large sections of the workforce, including teachers and doctors, have gone on strike because hyperinflation rapidly renders their wages worthless. Representative groups said salaries, now measured in trillions of dollars, are insufficient to pay for even the bus fare to work.

Zimbabwe also faces other crises, including a cholera epidemic that has claimed the lives of over 3,000 people, according to statistics from the World Health Organisation.

[edit] Sources

Wikipedia has an article about Hyperinflation in Zimbabwe.

• "Zimbabwe abandons its currency". BBC News Online, January 29, 2009
• "Zimbabwe Abandons Price Controls, Promotes Currency Trading". Bloomberg L.P., January 29, 2009
• "Zimbabwe: Inflation At 6.5 Quindecillion Novemdecillion Percent". AllAfrica.com, January 21, 2009
  

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