Zimbabwe shelves currency reform plans
7 hours ago

HARARE (AFP) — Zimbabwe's central bank chief said Sunday he has shelved plans to introduce a new currency in a bid to rein in galloping inflation and wants to direct efforts towards increasing supply of goods and services.

Central bank governor Gideon Gono told the state-run Sunday Mail that the launch of the currency will not be anytime this year.

"Although all the preparations are in place, the launch is not until next year," Gono said.

"Some people have already burnt their fingers by trying to offload the Zimbabwe dollar for the greenback at ridiculous rates. They thought they were beating the governor, but tough luck.

"What I can say is, relax guys. But at the same time, the country should be on high alert for only the Reserve Bank of Zimbabwe and its principals know when the lightning bolt will strike."

Since September, the local unit has officially been pegged at 30,000 dollars against the greenback, although on the black market is has slid to about 950,000 against the US dollar.

Last month, Gono had said the central bank would phase out the cash in circulation.

He warned businesses and individuals from keeping huge sums of money, saying that they would risk losing it as the central bank will impose strict deposit thresholds during the changeover to the new currency.

Zimbabwe is in the midst of an economic crisis, characterised by the world's highest rate of inflation -- currently at nearly 8,000 percent -- shortages of basic foodstuffs like sugar and cooking oil, and mass unemployment.

Gono stressed that sourcing foreign currency on the black market was illegal.

"What we want to see emerge from the current debate, however, is a situation where the business community is allowed to operate viably so as to avoid the loss of jobs, competitiveness and the loss of business," he said.

"For the people of Zimbabwe, the current battle is ensuring survival through the ability to get basic goods and services at affordable and yet viable prices."

In June, the government ordered businesses to halve the prices of goods, accusing them of fuelling inflation and working in conjunction with President Robert Mugabe's foes in the West.

Last month, Gono pledged that empty shop shelves would soon be replenished as he denounced the "anarchy" inspired by the government's order for retailers to slash their prices in half.

Zimbabwe to delay new currency launch - report
Sun 4 Nov 2007, 9:50 GMT

[-] Text [+] HARARE (Reuters) - Zimbabwe's central bank has deferred the introduction of a new currency until next year to focus on improving the supply of basic goods after a June price freeze ignited panic buying which emptied shop shelves.

Reserve Bank of Zimbabwe governor Gideon Gono said last month the launch of a new currency would be "very soon" and warned dealers against holding cash outside the bank system.

But in an interview with the state-owned Sunday Mail newspaper, Gono said the launch would have to wait until the supply of goods improved.

"Although all the preparations (for introducing new currency) are in place, the launch is not until next year," Gono told the weekly.

"For the people of Zimbabwe, the current battle is ensuring survival through the ability to get basic goods and services at affordable and yet viable prices," said Gono.

Gono -- who at time has criticised President Robert Mugabe's government's economic policies -- has warned the country against returning to the "anarchy" triggered by the price cuts.

The price freeze led to a slowdown in inflation in August. But the figure shot to a record 7,900 percent in September and analysts see it surging further as companies continue to hike prices to keep production up.

The central bank says a new currency would curtail rampant black market trade in foreign exchange and help fight the world's highest inflation rate.

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