Money printing Zimbabwe devalues currency by a hundred fold

HARARE, 2007 (AFP) – The Zimbabwean government on Thursday announced a devaluation of its currency against the US dollar by more than a hundred fold in a bid to enhance the country’s revenue, marred by hyperinflation.

“The reserve bank of Zimbabwe will adjust the exchange rate applicable to all purchases and sales of foreign exchange in the market from 250 Zimbabwean dollars per US dollar to 30,000 Zimbabwean dollars per US dollar with immediate effect,” Finance Minister Samuel Mumbengegwi told parliament.

“This new rate shall apply to Zimbabwe Revenue Authority Customs and Income Tax Valuations, with immediate effect.”

The exchange rate of 250 ZMD for one USD had been unchanged since August last year. On the parallel market, one USD is worth at present about 230,000 ZMD.

As part of revenue enhancing measures, Mumbengegwi said in Thursday’s budgetary speech that he would also institute additional cash collection measures in the areas of customs, duty, Value Added Tax and carbon tax.

This is in addition to drastic measures adopted by the government in the past, including price controls, as it tries to contain runaway inflation.

But economists said the new move, like previous ones, might no