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Africa
Zimbabwe postpones new currency
Central bank chief says his focus is on increasing supply of goods and services.
Last Modified: 04 Nov 2007 20:38 GMT

Zimbabwe is in the midst of an economic crisis, with shortages of basic foodstuffs [File: EPA]

The chief of Zimbabwe's central bank has postponed plans to introduce a new currency to rein in inflation.
 
Gideon Gono, the central bank governor, told the state-run Sunday Mail that the launch of the currency will not be anytime this year.
"Although all the preparations are in place, the launch is not until next year," Gono said.
 
"Some people have already burnt their fingers by trying to offload the Zimbabwe dollar for the greenback at ridiculous rates. They thought they were beating the governor, but tough luck."
Since September, the local currency has officially been pegged at $30,000 against the US dollar, although on the black market it has slid to about $950,000.

Last month, Gono had said the central bank would phase out the cash in circulation.

He warned businesses and individuals from keeping huge sums of money, saying that they would risk losing it as the central bank will impose strict deposit thresholds during the changeover to the new currency.

Economic crisis

"For the people of Zimbabwe, the current battle is ensuring survival through the ability to get basic goods and services at affordable and yet viable prices"

Gideon Gono,  central bank governor
Zimbabwe is in the midst of an economic crisis.

It has the world's highest rate of inflation - currently at nearly 8,000 per cent - shortages of basic foodstuffs like sugar and cooking oil, and mass unemployment.

Gono stressed that sourcing foreign currency on the black market was illegal.

"What we want to see emerge from the current debate, however, is a situation where the business community is allowed to operate viably so as to avoid the loss of jobs, competitiveness and the loss of business," he said.

"For the people of Zimbabwe, the current battle is ensuring survival through the ability to get basic goods and services at affordable and yet viable prices."

In June, the government ordered businesses to halve the prices of goods, accusing them of fuelling inflation and working in conjunction with western opponents of Robert Mugabe, Zimbabwe's president.

Last month, Gono pledged that empty shop shelves would soon be replenished as he denounced the "anarchy" inspired by the government's order for retailers to slash their prices in half.

Source:
Agencies
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