(TALKZIMBABWE) Gono slashes 10 zeros off currency
Gono slashes 10 zeros off currencyFloyd Nkomo
Wed, 30 Jul 2008 09:42:00 +0000
THE Central Bank Governor, Gideon Gono has announced that he will re-denominate the Zimbabwe dollar by slashing 10 zeros and will introduce a new currency on 1 August as part of current efforts to fight the effects of hyperinflation. The latest move makes 10 billion dollars equivalent to one dollar.
“The Zimbabwe dollar will be redenominated by a factor of one to 10, which means we are removing 10 zeros from our monetary value. Ten billion dollars today will be reduced to Z$1... effective from 1 August,” Dr. Gono said during a press conference which was attended by President Robert Mugabe and broadcast on national television.
He said the increasing number of zeros had constrained the operations of the banking system’s computer systems – including electronic calculators and cash machines – which have not been able to handle basic transactions in billions and trillions of dollars.
According to Gono, the new currency will run concurrently with the bearer cheques currently in circulation. “The new currency will co-circulate together with the family of bearer cheques ... which shall cease to be legal tender on the 31st of December 2008," Dr. Gono said.
He added that the Central Bank will issue a 500-dollar bill equivalent to 5 trillion dollars at the current rate.
The RBZ Governor last week vowed that zeros will never return to Zimbabwe. Speaking at the Midlands Agricultural Show on Saturday, Dr. Gono said: “This time, we will make sure that those zeroes that would come knocking on the governor's window will not return” and was confident that “this coming week will bring about the much needed relief in our national payment system.”
The current move is supported by banking and industry chiefs who this week appealed to central bank governor to slash zeroes from the country’s currency.
The Bankers Association of Zimbabwe (BAZ) and the Confederation of Zimbabwe Industries (CZI) had warned of a computer crisis if at least nine zeros were not removed from the currency. They argued that the country’s payment system could not handle figures above a $1 trillion, hence the need to slash the zeroes.
Meanwhile, President Mugabe, speaking at the same press conference said he was committed to a speedy and successful conclusion of ongoing unity talks between his Zanu PF party and the two formations of the opposition Movement for Democratic Change (MDC).
“Speaking for Zanu-PF and myself we are committed and want to see the speedy and successful conclusion of the talks so that we can focus on the turnaround of our economy,” said President Mugabe.
He, however, quickly warned that he will impose a state of emergency if profiteers take advantage of the currency change on August 1.
"Don't drive us further. If you drive us even more we will impose emergency measures. We don't want to place our country under emergency rule," Mugabe said.
President Mugabe’s remarks come ahead of a meeting later today in the capital Harare with South African President Thabo Mbeki to discuss progress of the talks.
Labels: CURRENCY, GIDEON GONO, INFLATION, ZIMBABWE
posted by MrK @ 9:48 PM
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