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Creeping Dollarization Sanctioned By Zimbabwe Central Bank Chief

With dollarization taking firm hold in the Zimbabwean economy, the Reserve Bank of Zimbabwe is reported to have authorized some 1,200 retail and wholesale businesses to charge for their goods in the U.S. dollar, South African rand and other hard currencies.

Internet news agency ZimOnline quoted RBZ Governor Gideon Gono as saying his order will remain in effect for an initial 18 months as "an experiment."

Gono is said to have emphasized that the Zimbabwe dollar is still the official currency and that this doesn't mean the economy is being officially dollarized.

The Harare Tribune Web site also reported the development.

With hyperinflation officially measured at 11.2 million percent in July and now estimated by many to have accelerated far beyond that, businesses are determined to secure hard currency revenues to hedge against losses in the plunging Zimbabwe dollar.

Businessman and former Zimbabwe National Chamber of Commerce president Luxon Zembe told reporter Patience Rusere of VOA's Studio 7 for Zimbabwe that the move will help businesses obtain foreign currency to buy raw materials, boosting production and thereby making now-scarce goods more widely available.

But Acting Secretary General Japhet Moyo of the Zimbabwe Congress of Trade Unions said that if businesses are to be allowed to charge hard currency for food and other essential goods and services, then workers should be paid in hard currency.

Consumer Tafadzwa Mlambo of Harare echoed Moyo's sentiments, saying only those with access to foreign exchange will be able to afford basic goods.

More reports from VOA's Studio 7 for Zimbabwe...