Zimbabwe central bank knocks 10 zeroes off currency

July 30th, 2008 - 6:40 pm ICT by IANS  

Harare, July 30(DPA) Zimbabwe’s Reserve Bank governor Gideon Gono announced Wednesday the bank would knock 10 zeroes off the country’s battered currency Aug 1 in a bid to prop up the nearly worthless money. “Ten billion (Zimbabwean) dollars today will be reduced to one dollar with effect from Aug 1,” Gono said.

Gono was flanked by President Robert Mugabe for the announcement here of the latest in a series of moves to devalue the currency in recent years by dropping zeroes.

The number of zeroes being axed this time is, however, a record and reflects the dire straits of the Zimbabwean economy.

The Zimbabwe dollar has hurtled from $1 to 5,300 Zimbabwean at the beginning of the year to up to 800 billion Zimbabwean dollars for single greenback in the past few days.

With inflation running at several million percent - analysts say the Reserve Bank estimate of 2.2 percent is unrealistically low - even 100 billion dollars will not buy a loaf of bread.

The situation has shoved many basic foods beyond the reach of ordinary people and led to businesses increasingly refusing to deal in local currency.

Gono said the last solution to the inflation was to increase output, particularly in the country’s once flagship agricultural sector.

“We’ve not done enough since we started our agricultural reform,” he said, referring to the seizure of thousands of white-owned farms by ruling party members and cronies since 2000 - Mugabe’s brand of land reform blamed for the current economic crisis.

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