(RCSD) Zimbabwe sidelines currency as economy collapses

Zimbabwe sidelines currency as economy collapses

http://www.timesonline.co.uk/

January 29, 2009

Jan Raath in Harare

Zimbabwe sidelined its own near-worthless currency yesterday,
declaring the
US dollar, the British pound and even the Botswana Pula as legal
tender in
the country's rapidly collapsing economy.

"The Government is allowing the use of multiple foreign currencies for
business alongside the Zimbabwean dollar," Patrick Chinamasa, the
acting
Finance Minister, announced in a humiliating admission that the
Mugabe's
regime's battle to prop up the national currency was lost.

From now on, shops, insurance companies, schools, state-owned
utilities
could charge in foreign and local currency - though many of them will
have
to be licenced. A range of taxes will also be payable in hard and
local
currency. Mr Chinamasa's estimates of expenditure were presented in
Zimbabwe
dollars, US dollars and Rand.

Private companies will able to pay employees in hard currency, but the
regime is risking serious unrest by effectively leaving out Government
workers, including the army and the police.

Last month, hundreds of soldiers went on the rampage over monthly pay
of
several billion that then could buy a couple of loaves of bread. The
unpredictability of the army is seen as the most serious threat to
President
Mugabe's continued stay in power.
Mr Chinamasa said that civil servants would continue to be paid in
Zimbabwe
dollars but would also receive a monthly allowance worth a basket of
basic
household goods in US dollar terms - in government-issued vouchers.

The Government began to pull back on its rigorous exchange control
policy
late last year when it issued licences to shops - at US$ 20,000 a time
- to
charge in foreign currency. Supermarket shelves that had been empty
for over
a year were suddenly filled with imported goods, but police were still
arresting people dealing in hard currency outside the official system
and
searching bus passengers for foreign banknotes.

MPs in the house of assembly roared their approval as Mr Chinamasa
announced
the move that ends decades of Soviet bloc-type economic controls which
have
steadily eroded what was one of Africa's most robust economies. He
also
loosened a wide range of restrictions that have contributed to the
economy's
ruin. "It requires a paradigm shift in terms of acknowledging the
reality
that we cannot eat what we don't have," he said.

He cancelled price controls introduced in May last year that instantly
caused shortages of goods which surfaced again on the black market at
sharply steeper prices. The Prices and Incomes Commission, whose
inspectors
put thousands of struggling businessmen in jail for "overcharging" and
often
then looted their businesses, would be confined to "an advisory role,"
Mr
Chinamasa said.

The Finance Minister stunned MPs by accusing the country's central
bank w of
fuelling inflation through "excessive money supply from unbudgeted
expenditure". Under its governor, Gideon Gono, the bank has adopted a
proudly declared policy of printing money as fast as it could to bail
out
the Government's reckless spending. The bank's enthusiasm for printing
money
has been the most important factor driving Zimbabwe's hyperinflation.

Zimbabwe's shambolic economic management was characterised by the way
Mr
Gono marketed his autobiography when it went on sale in December. In
the
state-controlled bookstore selling it, the book went for US$ 25 - the
only
item in the shop charged for in foreign currency.

"Blair (TC)" wrote in message
...
Zimbabwe sidelines currency as economy collapses


Zimbabwe sidelined its own near-worthless currency yesterday,
declaring the
US dollar, the British pound and even the Botswana Pula as legal
tender in the country's rapidly collapsing economy.
snip for brevity


Does this mean that all those already issued Zimbabwean NVI (Non Value
Indicator) stamps got now values in $$ or ££? If so, this would be a strong
argument for the stamp collecting ;-)

--
Victor Manta

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On Jan 30, 10:05*am, "Blair (TC)" wrote:
Zimbabwe sidelines currency as economy collapses

http://www.timesonline.co.uk/

January 29, 2009

Jan Raath in Harare

Zimbabwe sidelined its own near-worthless currency yesterday,
declaring the
US dollar, the British pound and even the Botswana Pula as legal
tender in
the country's rapidly collapsing economy.

"The Government is allowing the use of multiple foreign currencies for
business alongside the Zimbabwean dollar," Patrick Chinamasa, the
acting
Finance Minister, announced in a humiliating admission that the
Mugabe's
regime's battle to prop up the national currency was lost.

From now on, shops, insurance companies, schools, state-owned
utilities
could charge in foreign and local currency - though many of them will
have
to be licenced. A range of taxes will also be payable in hard and
local
currency. Mr Chinamasa's estimates of expenditure were presented in
Zimbabwe
dollars, US dollars and Rand.

Private companies will able to pay employees in hard currency, but the
regime is risking serious unrest by effectively leaving out Government
workers, including the army and the police.

Last month, hundreds of soldiers went on the rampage over monthly pay
of
several billion that then could buy a couple of loaves of bread. The
unpredictability of the army is seen as the most serious threat to
President
Mugabe's continued stay in power.
Mr Chinamasa said that civil servants would continue to be paid in
Zimbabwe
dollars but would also receive a monthly allowance worth a basket of
basic
household goods in US dollar terms - in government-issued vouchers.

The Government began to pull back on its rigorous exchange control
policy
late last year when it issued licences to shops - at US$ 20,000 a time
- to
charge in foreign currency. Supermarket shelves that had been empty
for over
a year were suddenly filled with imported goods, but police were still
arresting people dealing in hard currency outside the official system
and
searching bus passengers for foreign banknotes.

MPs in the house of assembly roared their approval as Mr Chinamasa
announced
the move that ends decades of Soviet bloc-type economic controls which
have
steadily eroded what was one of Africa's most robust economies. He
also
loosened a wide range of restrictions that have contributed to the
economy's
ruin. "It requires a paradigm shift in terms of acknowledging the
reality
that we cannot eat what we don't have," he said.

He cancelled price controls introduced in May last year that instantly
caused shortages of goods which surfaced again on the black market at
sharply steeper prices. The Prices and Incomes Commission, whose
inspectors
put thousands of struggling businessmen in jail for "overcharging" and
often
then looted their businesses, would be confined to "an advisory role,"
Mr
Chinamasa said.

The Finance Minister stunned MPs by accusing the country's central
bank w of
fuelling inflation through "excessive money supply from unbudgeted
expenditure". Under its governor, Gideon Gono, the bank has adopted a
proudly declared policy of printing money as fast as it could to bail
out
the Government's reckless spending. The bank's enthusiasm for printing
money
has been the most important factor driving Zimbabwe's hyperinflation.

Zimbabwe's shambolic economic management was characterised by the way
Mr
Gono marketed his autobiography when it went on sale in December. In
the
state-controlled bookstore selling it, the book went for US$ 25 - the
only
item in the shop charged for in foreign currency.

Zimbabwe to cut 10 zeros off currency

http://www.presstv.ir


Sun, 01 Feb 2009 19:00:42 GMT
The newly unveiled Zimabawe's hundred trillion dollar note
Zimbabwe's central bank is to slash 10 zeros from its banknotes due to
trouble it has caused to computer systems and among businessmen.

The Governor of the Reserve Bank of Zimbabwe, Gideon Gono, will
present the first quarter of the year monetary policy statement on
Monday amid calls by businesses for the slashing of zeros they say are
collapsing their computers, Press TV correspondent Pindai Dube
reported.

"The zeros are too many for our machines to handle," the chairman of
the Zimbabwe National Chamber of Commerce (ZNCC), Obert Sibanda, told
Press TV.

Sibanda added, "It's hard to count zeros and slashing the zeros is the
only way to make it easy for business to transact in local currency in
our hyper-inflationary environment."

A man holds a 100 billion dollar note, Harare, Zimbabwe.
Currently the country's highest currency denomination is a 100
trillion dollar Zimbabwean note which buys two loaves of bread.

In mid 2008, Zimbabwe slashed 10 zeros off the country's valueless
currency and introduced coins. Ten billion Zimbabwean dollars which
was the highest currency denomination by then became one dollar.

Inflation is currently at 231 million percent but independent finance
institutions put it over a quintillion.

Zimbabwe's government last week dumped the local currency in its 2009
national budget presentation and opened up to multiple foreign
currencies, in a clear sign of lack of confidence in the local unit.

Acting Finance Minister Patrick Chinamasa in the national budget
presentation on Thursday hinted that the central bank will revalue the
currency.

"As the Zimbabwean dollar trades concurrently with other currencies;
it will be critical that it be revalued and thereafter maintain
stability," he said.

ADDENDUM

A few days later, the annoucement was
made that 12 zreos would be cut and not 10.

Blair

"Blair (TC)" wrote in message
...
ADDENDUM

A few days later, the annoucement was
made that 12 zreos would be cut and not 10.

Blair

At best, they should cut the whole figure and introduce the NVI banknotes,
like they did with their stamps. ;-)

Anyway, like in Hungary toward the end of the hyperinflation period, the
whole amount of the printed Zimbabwean money will soon cost less then US$ 1.

--
Victor Manta

----------------------------------------------------------------------------
Philatelic Webmasters Organization: http://pwmo.org/
Art on Stamps: http://artonstamps.org/
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