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Zim promises money reforms
24/07/2008 22:10 - (SA)
Harare - Zimbabwe's central bank on Thursday said it would soon implement reforms to ease the effects of hyperinflation as consumers, retailers and banks struggle to make even simple transactions with a virtually worthless currency.
Once the beacon of southern Africa, Zimbabwe now has the
world's highest inflation rate - officially above two million
percent but widely seen much higher.
Critics blame this and other economic woes - including
chronic shortages of food and other basic commodities - on
mismanagement by President Robert Mugabe's government.
The country's largest bank note, a 100 billion Zimbabwe
dollar bill introduced on Monday, cannot buy a loaf of bread and
retailers and banks have said it has become difficult to deal
with an ever-increasing string of zeros on the currency.
"The Reserve Bank of Zimbabwe wishes to advise ... that
appropriate measures are being put in place to address the
current setbacks being faced on the currency front, as well as
on financial and accounting systems," said central bank Governor
Gideon Gono.
"Accordingly, therefore, the next few days will see the
Reserve Bank unveiling measures that would address concerns on
the current minimum cash withdrawal limits, as well as with the
IT systems digit handling constraints."
Zimbabwe lopped off three zeros from its currency in August
2006, and financial accounts and prices were adjusted according,
but hyperinflation has since forced the central bank to keep
issuing higher-denomination notes, piling back the zeros.
At the beginning of the year, the largest bank note was
worth Z$10 million, but it has now lost its value and is
commonly found strewn on the capital Harare's streets, rejected
by both street vendors and beggars alike.
On Thursday, one US dollar fetched 45 billion Zimbabwe
dollars on the official market, but was worth as much as 100
billion Zimbabwe dollars on a thriving black market fuelled by
acute foreign currency shortages.
On Wednesday, Zimbabwe's trade union federation ZCTU wrote a
letter to Gono, asking him to relax limits on cash withdrawals
from bank accounts.
The ZCTU said the existing maximum cash withdrawal limit of
100 billion Zimbabwe dollars was not enough for urban workers
whose daily public transport costs alone amount to about 150
billion Zimbabwe dollars.
- Reuters
- Reuters
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Zimbabwe Special Report
