|
Zimbabweans Turn to U.S. Dollar as Hyperinflation Erodes Value of Local Currency
 The sun was blazing high in the sky just before 1 p.m., five hours after Timothy opened the sparsely stocked shop he manages in a dusty slum here in Zimbabwe's capital. It was time to change the prices.He stepped outside and tapped numbers into his orange Nokia cellphone. After many tries, he reached a black-market money dealer, who relayed an up-to-the-hour exchange rate: 1.1 million Zimbabwe dollars to one U.S. dollar, up 10 percent since morning. Within minutes, the handwritten price tags on the store's bags of cornmeal, the staple food here, had jumped from 17.6 million to 19.2 million Zimbabwe dollars. "I'll call again in a few hours," said Timothy, 26, who did not want his last name published for fear of angering authorities. In Zimbabwe, where historic hyperinflation is causing the value of local currency to evaporate in people's wallets, it is increasingly the greenback that rules. Many vendors and businesses now demand American currency. Others peg their prices to the U.S. dollar and charge less if payment is made with it or the South African rand, widening a buying-power divide between those with access to foreign currency and those without -- mostly people who have no relatives abroad and people in rural areas. The black market for stable currencies has boomed in recent years as Zimbabwe's once-thriving economy has tanked. In September, the government acknowledged as much by announcing that it would license about 1,200 stores and gas stations to sell in foreign currency and then buy some of their earnings at a low exchange rate. But as workers, suppliers and unlicensed stores shun Zimbabwe's currency, the U.S. dollar has become the de facto legal currency at nearly every level of society. Eric Bloch, a Zimbabwean economist, estimates that the market is about 90 percent dollarized. Posted by: Fred 2008-12-05 |
| http://www.rantburg.com/poparticle.php?ID=256573 |