- The governor Zimbabwe's Reserve Bank plans to slash several zeroes from Zimbabwean dollar bank notes and maximise cash limit withdrawals in an effort to tackle the country's hyperinflation and cash shortages, state media reported yesterday.
Reserve Bank chief Gideon Gono, who issued a new Zimbabwe 100 billion dollar note just a week ago, announced at the agricultural show held over the weekend, his plans to reform the country's economy.
"This time, we will make sure that those zeros that would come knocking on Governor's window will not return. They are going for good," Mr Gono was quoted as saying.
Mr Gono said he will make an announcement later this week on measures that government will take to address cash shortages in Zimbabwe. "I won't give you the exact date and the new withdrawal limits because those who do not wish the country well will start coming up with their little schemes to counter us," he said.
Restriction of cash withdrawals to only Zim$ 100 billion have been in place for a long period of time. This led some dealers with access to cash through corrupt bank officials and those in liquor business to sell cash to desperate Zimbabweans. Money was sold at rates ranging between 20 percent and 50 percent and figure would be upped depending on how desperate the customer was.
The bank Governor said the current cash shortages had nothing to do with a German company's termination of its contract of selling banknote paper to Zimbabwe, describing the termination of contract, as part of the West's "devilish" plans of meddling in the running of the country through sanctions.
He said western sanctions had forced government to launch Basic Commodities Supply Side Intervention (BACOSSI), which he claimed "brought relief" to millions of suffering Zimbabweans.
Mr Gono warned businesses and individuals who were charging their goods and services in foreign currency to halt their illegal operations, since Zimbabwe had no foreign exchange in its banks.
Zimbabwe, which was once one of the richest countries in Africa, at present finds itself falling into economic chaos with inflation reaching record levels of an incomprehensive 2.2 million percent and with zeroes being regularly added to the currency.
But the recipe of Mr Gono has been tried before. Only in 2006, the Central Bank slashed three zeros from the currency when inflation stood at a few hundred percent, already then the highest rate in the world.
Zimbabwe's money shortages, inflation and chronic shortages of food, gasoline, medicine and most basic goods have brought many businesses in Harare to a standstill. Smaller shops and at least four main restaurants have shut down, while petty traders are struggling to cope with the predicting correct prices and devaluation of the currencies.
Zimbabwe state media reported on Saturday about nightclubs cancelling music shows because audiences dried up after a 2,000 percent increase in beer and soft drink prices in the past week. Several bars and clubs were openly accepting US dollars, even though that is against the law.
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