Zimbabwe's government admitted defeat Thursday in a fight against dizzying inflation, allowing business to be done in U.S. dollars and bank notes of neighboring countries. Zimbabwe has the world's highest official inflation, with its currency now printed in the trillions of dollars. This month, the central bank introduced a new 100 trillion Zimbabwe dollar note.The announcement by acting Finance Minister Patrick Chinamasa acknowledged the black market practices that have been a reality for months because of Zimbabwe's economic meltdown. State control of foreign currency has allowed a ruling clique to enrich themselves by buying U.S. dollars at lower government rates and selling them at the much higher black market rate.
City workers, teachers, doctors and even bus drivers have gone on strike demanding to be paid in U.S. dollars or South African rand.
In a budget speech, Chinamasa said civil servants will continue to be paid in local currency but that their salaries will be brought in line with inflation. They also will be paid a monthly allowance in a foreign currency. Chinamasa said price controls also would be removed as of Sunday.
Shelves emptied of basic goods such as bread, sugar and milk after the government forced shop owners to sell stock at ridiculously low prices.
The U.N. food program said Thursday that 7 million Zimbabweans _ 80 percent of the population by some estimates _ need food aid.