Zimbabwe Central Bank Promises Currency Reforms

ZIMBABWE’S central bank yesterday said it would soon implement reforms to ease the effects of hyperinflation as consumers, retailers and banks struggle to make even simple transactions with a virtually worthless currency.

 

This comes amid revelations that an Austrian company is supplying Zimbabwe’s central bank with materials used in the design and printing of notes.

Company officials confirmed that the company, Jura, was dealing with the Reserve Bank but would consider revising the relationship if required to do so by the European Union which extended sanctions on Zimbabwe this week. Were Jura to withdraw its licence and software, the RBZ might be unable to produce a bigger note.

Once the beacon of southern Africa, Zimbabwe now has the world’s highest inflation rate — officially above two million percent but widely seen as higher.

The country’s largest bank note, a $100 billion bill introduced on
Monday, cannot buy a loaf of bread and retailers and banks have said it has become difficult to deal with an ever-increasing string of zeros on the currency.

“The Reserve Bank of Zimbabwe wishes to advise … that appropriate measures are being put in place to address the current setbacks being faced on the currency front, as well as on financial and accounting systems,” said central bank Governor Gideon Gono.

“Accordingly, therefore, the next few days will see the Reserve Bank unveiling measures that would address concerns on the current minimum cash withdrawal limits, as well as with the IT systems digit handling constraints.”

Zimbabwe lopped off three zeros from its currency in August 2006, and financial accounts and prices were adjusted accordingly, but hyperinflation has since forced the central bank to keep issuing higher-denomination notes, piling back the zeros.

At the beginning of the year, the largest bank note was worth $10 million, but it has now lost its value and is commonly found strewn on the capital Harare’s streets, rejected by both street vendors and beggars alike.

On Wednesday, Zimbabwe’s trade union federation ZCTU wrote a letter to Gono, asking him to relax limits on cash withdrawals from bank accounts. — Reuters/Staff Writer.