Maravi

(TALKZIMBABWE) Zim dollar suspended

Zim dollar suspended
Our reporter
Mon, 13 Apr 2009 03:47:00 +0000

ZIMBABWE will not use its own local currency for at least a year while iot tries to repair the economy, according to reports from the Ministry of Economic Planning and Development.

The country allowed the use of multiple foreign currencies in January to stem hyperinflation which had rocketed to over 230 million percent and left the Zimbabwe dollar almost worthless.

The inclusive Government of President Robert Mugabe and Prime Minister Morgan Tsvangirai has decided the Zimbabwe dollar should only be reintroduced when industrial output reaches about 60 percent of capacity from the current estimated 20 percent average.

"The Zimbabwe dollar will be out for at least a year. We resolved that there will be no immediate plans to (re)introduce the money because there is nothing to support and hold its value," said Economic Planning and Development Minister Elton Mangoma.

"Our focus is to first ensure that we have a vibrant industry. If we try to reintroduce the local currency now, it will face the same fate of being wiped out of its value within weeks."

Inflation has continued to fall since the introduction of multiple currencies.

On Thursday, Zimbabwe's Central Statistical Office (CSO) said consumer prices fell for a third straight month in March after the government abandoned the Zimbabwe dollar.

The CSO said inflation stood at -3.0 percent month-on-month in March compared with -3.1 percent in February, as food prices fell.

Zimbabwe is seeking an urgent cash injection of $2 billion to stabilize an economy suffering unemployment above 90 percent and a severe shortage of foreign currency.

Western donors have held back aid, demanding the inclusive Government to undertake political and other reforms.

Labels: NEOCOLONIALISM, ZIMBABWE DOLLAR

posted by MrK @ 5:55 AM