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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

(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.

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.
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)
Zimbabwe's President Robert Mugabe addresses the 63rd session of the United Nations General Assembly at UN headquarters, Thursday, Sept. 25, 2008.
Zimbabwe's President Robert Mugabe addresses the 63rd session of the United Nations General Assembly at UN headquarters, Thursday, Sept. 25, 2008.   (AP Photo/Frank Franklin II)
Robert Mugabe, president of Zimbabwe, addresses the 63rd session of the United Nations General Assembly at UN headquarters, Thursday Sept. 25, 2008.
Robert Mugabe, president of Zimbabwe, addresses the 63rd session of the United Nations General Assembly at UN headquarters, Thursday Sept. 25, 2008.   (AP Photo/Richard Drew)
An unidentified man holds the new 100 billion dollar note introduced by the Reserve Bank of Zimbabwe, in Harare Tuesday, July, 22, 2008. Recently Zimbabwe revalued its currency at 10 billion to one.
An unidentified man holds the new 100 billion dollar note introduced by the Reserve Bank of Zimbabwe, in Harare Tuesday, July, 22, 2008. Recently Zimbabwe revalued its currency at 10 billion to one.   (AP Photo/Tsvangirayi Mukwazhi)
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