02 February 2009

Was one trillion, now just one

Rico says it's one of those 'only in fucked up little countries nobody cares about' stories:
Zimbabwe is revaluing its dollar again, removing twelve zeros from the currency with immediate effect. The country's central bank is introducing seven new notes in an effort to stave off economic collapse. The country is in the grip of world-record hyperinflation. The most recent estimate in July 2008 put it at 231% per month. Only last month, a Z$100 trillion note was introduced and the government moved to allow people to use foreign currencies alongside Zimbabwe's dollar. The announcement will see Z$1 trillion reduced to Z$1. The denominations of the new notes are Z$1, Z$5, Z$10, Z$20, Z$50, Z$100 and Z$500.
The governor of the Reserve Bank of Zimbabwe, Gideon Gono, said: "Yesterday's trillionaires, I am sorry, will not be able to buy their favourite drink today." Mr Gono gave no updated inflation figures.
Last year, the central bank was forced to take 10 zeros from the local unit in an effort to make the currency more manageable, but the zeros returned within a few months. On Sunday, US$1 (£0.71) was equal to Z$3 or Z$4 trillion.
In a separate bid to tackle inflation, the government last month allowed businesses to charge in foreign currencies and said those businesses could pay their workers in foreign currency. Until then, only licensed businesses could accept foreign currencies, although it was common practice. The government added that the country's stock exchange, which has not traded for two months, would also be licensed to trade in foreign currency, once listed firms and the exchange provide evaluation criteria.
John Robertson, a leading Harare-based economist, said Mr Gono's latest statement contained some positive measures but did not go far enough. "It would appear he is trying to restore the Zimbabwean dollar, but, given the choice of multiple currencies, who would want to trade in Zimbabwe dollars?" he told the al-Reuters news agency.
Zimbabwe is also facing a deepening humanitarian crisis. A cholera outbreak has killed more than 3,000 people, according to the World Health Organization, and the World Food Programme says seven million Zimbabweans are in need of food aid, up from 5.1 million in June.
The country's situation has been worsened by the political crisis that resulted from last year's disputed presidential elections. But, last week, Zimbabwe's opposition leader Morgan Tsvangirai said his party would join a unity government with President Robert Mugabe's Zanu-PF. After the announcement, former UN Secretary-General Kofi Annan led calls for world leaders to help rebuild Zimbabwe's economy.
Rico says 'rebuild Zimbabwe's economy'? As what? A carnival ride?

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