Zimbabwe: Local dollar redundant as budget allows multiple currency trading

30 January, 2009 in Zimbabwe

source: SW Radio Africa
By Alex Bell
29 January 2009

The government has for the first time acknowledged that the Zimbabwe dollar has no value, after acting Finance Minister Patrick Chinamasa, on Thursday detailed the country’s budget proposal in the US greenback.

The proposal, which will officially pave the way for the disappearance of the local currency in trading, will make dealing in multiple currencies legal for all Zimbabweans, in theory to curb hyperinflation. The inflation rate is the highest in the world and has seen the local dollar crumble to its current worthless position. The economy has for weeks been informally ‘dollarised’ with almost all sectors trading in US dollars, and the new budget proposal has made the move official.

Analysts from South Africa’s Standard Bank had said the official dollarisation of the Zimbabwean economy would be confirmed if taxes and duties were charged in forex – an action that has now been drafted in the new budget proposal.

SW Radio Africa’s Harare correspondent, Simon Muchemwa, explained on Thursday that US$1.9 billion has been proposed for ministerial allocation, with the majority of the money being set aside for [continue reading]

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