October 1, 2008

Zimbabwe Currency Crisis Peaks

More than 600 shops and services are now licensed to trade using foreign currency in Zimbabwe, the southern African country with the highest rate of inflation in the world.

The International Herald Tribune reported that Zimbabwe’s Central Bank authorized the use of foreign moneys, such as the U.S. dollar and South African rand, which are already common in the black market.

Zimbabwe’s government, still reeling from a long-term economic crisis, hopes the move will build up supplies of food and basic necessities in local markets.

An inflation rate of 11 million percent has caused many Zimbabweans to cross the border into neighboring countries to buy corn meal, medicine, cooking oil and fuel.

Commodities are in such short supply, the article said, that aid agencies fear close to two million Zimbabweans will need food supplies in October.

Businesses were charged $20,000 for foreign currency licenses and the Reserve Bank will receive a 15 percent royalty on all related sales.

–Julia Hengst/Newsdesk.org

Source:

“Zimbabwe allows trading in foreign currency”
International Herald Tribune, September 26, 2008

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