Zimbabwe unveils new monetary measures to curb hyper-inflation currency

HARARE, July 31 (Chinese media) -- The Zimbabwe central bank

has unveiled a set of new monetary measures to curb the country's hyper-inflated

currency and answer calls to relax limits on cash withdrawals from bank

accounting.

A Zimbabwean 100 billion dollar note.

Zimbabwe, grappling with a record 2.2 million percent inflation, will on

Friday issue new bank notes that will revalue a 10 billion note to one

zimdollar, the governor of the Central Bank said.(Chinese media/AFP

FilePhoto)
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According to Zimbabwe state media the Herald, the

measures which announced by central bank governor Gideon Gono on Wednesday

mainly include the introduction of a new currency, raise of daily cash

withdrawal limits and the introduction of old coins in circulation.

Representing his 2008 mid-term monetary policy

statement in Harare, the central bank governor slashed off 10 zeros from the

country's currency, thus turning 10 billion dollars into one dollar. At the same

time, the governor announced the introduction of a 500 dollar note.

While introducing a new 25 cent coin, Gono also

announced the introduction of old coins which he hoped will increase the amount

of money in circulation. The old coins include 5 dollars, 2dollars, 1 dollar,

and 50 cent, 20 cent and 10 cent coins.

Further, the central bank chief raised the daily cash

withdrawal limits by 1,900 percent to 2 trillion dollars or 200 dollars in the

new currency.

The new and old currency will co-circulate with the

existing bearer checks and special agro checks, which will expire on December

31.

The monetary measures will come into effect on

Friday, the Herald reported.

Speaking on the representation of the new monetary

measures, Gono said "Go back and look for those coins, we never demonetized

them."

"We once again wish to call upon stakeholders to

exercise restraint in their demand for cash and in how prices are set in the

goods and services markets," Gono said.

"The current reform efforts will, therefore, work to

sustain permanency of the new currency being rolled out, along with the

conveniences it will bring," the Herald quoted the central bank chief as saying.

The hyper-inflation rate in the country was estimated

at 2.2 million percent year-on-year last month.

To fend off the threat of a wholesale loss of

confidence among depositors and investors, it has become necessary to increase

withdrawal limits and lop off additional zeros, the Herald commented.

The proliferation of zeros have made calculations

difficult as the banking system could not read numbers excess of 10 billion.

Between May and September 2003, Zimbabwe experienced

critical cash shortage that witnessed queueing for hours to withdraw their

savings.

Zimbabwe introduced its largest bank note of 100

billion dollar bill mid in July this year, which is still not enough to buy a

loaf of bread.Banks and retailers have been complaining to the government that

it has become difficult to deal with an ever-increasing string of zeroes on the

country currency.

In August 2006, the Zimbabwe central bank cut three

zeros from the old currency and at the same time issued a new family of bearer

checks.

The call to raise the daily cash withdrawal limits

has been in the air for a long time with the Zimbabwe trade union federation

ZCTU as the latest. It sent an appeal letter to the country's central bank

earlier this month, urging it to relax daily cash withdrawal limits.

The new monetary measures are adopted to fight the

inflation over the years and set the economic development at the right

track.

Soon After the central bank chief announced the

introduction of the new monetary measures, Zimbabwe President Robert Mugabe

warned the country's business sector that he will impose emergency rules if they

profiteer.

In a televised address, Mugabe said "If you drive us

more than you have done, we will impose emergency measures, and we do not want

to place our country in a situation of emergency rules."



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emergency rules to deal with errant

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HARARE, July 31 (Chinese media)

-- Zimbabwe President Robert Mugabe has warned the business sector that the

government will not hesitate to invoke emergency rules to deal with errant

businesses that cause unnecessary suffering to ordinary Zimbabweans, state media

the Herald reported on Thursday.Full story

Zimbabwe central bank announces

introduction of new

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HARARE, July 31 (Chinese media)

-- The Zimbabwe central bank has announced the introduction of a new currency to

curb the country's hyper-inflated currency, state media the Herald reported on

Thursday. Full story