THE TELEGRAPH: Robert Mugabe's government has bowed to financial reality and legalised the use of foreign currency in Zimbabwe's shattered economy.
It is the final humiliation for Zimbabwe's battered currency, which was worth more than the US greenback at independence in 1980.
Even after two revaluations that have knocked a total of 13 zeros off it, it was trading on the black market on Wednesday at around 6,000 to the USD – or 60,000,000,000,000,000 to one in terms of the original Zimbabwe dollar.
Gideon Gono, the reserve bank governor and a key player in the ruling Zanu-PF party, said that 250 wholesalers and 1,000 retailers would be licensed to accept foreign currency as an 18-month "experiment".
"These reforms are essentially a pragmatic response to the realities in the economy," he said. "We have watched and observed with heavy hearts the suffering of fellow Zimbabweans as they wait and continue to wait in long queues at the borders as they bring in basic commodities.
"We have also seen desperate mothers, youth and the elderly spending cold nights in foreign lands as they seek for basic commodities."
But while Mr Mugabe and his officials lament the country's woes, they consistently blame them on foreign plots and profiteering businessmen, rather than their own mismanagement, typified by the seizure of white-owned land from 2000 onwards, which destroyed commercial agriculture, the mainstay of the economy.
Since then the country has spiralled downwards, with millions leaving in search of work abroad, particularly in South Africa, and officially inflation in Zimbabwe is now running at 11.2 million per cent – unofficial estimates put it far higher.
The imposition of price controls failed to dampen inflation and instead merely saw goods and commodities vanish to the black market. Final Humiliation for Zimbabwe Dollar as Foreign Currency Legalised >>> By Sebastien Berger | September 11, 2008
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