Zimbabwe introduces new currency

July 30, 2008

, Zimbabwe, July 30 – Zimbabwe\’s central bank has said it will introduce a new currency on 1 August as part of efforts to fight the effects of hyperinflation.

The bank\’s governor, Gideon Gono, has announced zeros will be lopped off the Zimbabwe dollar, making 10bn dollars one dollar.

Only last week, the government introduced the Z$100bn note.

South Africa\’s Thabo Mbeki is due in Harare after crisis talks between government and opposition were halted.

He will meet President Robert Mugabe, whom the opposition have accused of stealing the election earlier this year.

It emerged that President Mbeki held a meeting in the South African capital, Pretoria, on Tuesday with the opposition MDC\’s Morgan Tsvangirai.

Mbeki, the lead mediator on the Zimbabwe crisis, has said the two sides are determined to reach an agreement within a two-week time-frame at the talks in a secret location near Pretoria.

But opposition sources said the talks have reached deadlock.

After the currency announcement, Mugabe warned the country\’s businessmen in a televised address to stop profiteering or face emergency measures.

"The Zimbabwe dollar will be redenominated by a factor of one to 10, which means we are removing 10 zeros from our monetary value. Ten billion dollars today will be reduced to Z$1… effective from 1 August,"  Gono said in a television broadcast.

The high rate constrained the operations of the country\’s computer systems, with computers, calculators and banks\’ cash machines not able to handle basic transactions in billions and trillions of dollars, he added.

The new Z$100bn (under $2, £1) note introduced last week is not enough to buy a loaf of bread.

Inflation is officially running at more than 2,000,000%, but many analysts believe the true inflation figure is at least 9,000,000%.

So far this year, Zimbabwe has been forced to print Z$100m, Z$250m and Z$500m notes in rapid succession, now mostly worthless.

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