Zimbabwe Makes US Dollar Legal Tender

Inflation rate of 11M% makes local currency largely worthless
By Jason Farago,  Newser Staff
Posted Sep 26, 2008 7:49 AM CDT
Zimbabwean President Robert Mugabe attends an address by the Governor of the Reserve Bank in Harare, Wednesday, July 30, 2008. Inflation has hit 11 million percent.   (AP Photo)
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(Newser) – The government of Zimbabwe will allow consumers and shops to deal in American and South African currency as an 11 million percent inflation rate continues to pummel the nearly worthless Zimbabwean dollar. Cash remains in short supply in Zimbabwe, and on a flourishing black market a US dollar can fetch 10 times the price offered at a bank. But trading in anything but the local currency has been illegal.

In Harare and other cities, Zimbabweans endure hours-long lines at ATMs to withdraw rapidly depreciating money. Recently the meltdown grew so severe that the currency was revalued: 1 new Zimbabwean dollar is worth 10 billion in the old denomination. Economists foresee no end to Zimbabwe's economic collapse so long as Robert Mugabe clings to power.