World News

Zimbabwe revalues currency again

A man holds the new Zimbabwe currency introduced into circulation in the capital Harare September 30, 2008. REUTERS/Philimon Bulawayo

HARARE (Reuters) - Zimbabwe’s central bank revalued its dollar again on Monday, lopping another 12 zeros off its currency to try to tame hyperinflation and avert economic collapse.

Reserve Bank of Zimbabwe Governor Gideon Gono also said some foreign exchange controls will be relaxed and gold producers now can sell bullion directly and not to the central bank as in the past.

“This Monetary Policy Statement unveils yet another necessary program of revaluing our local currency, through the removal of 12 zeroes, with immediate effect,” Gono said in his MPC statement.

Zimbabwe’s economy is in ruins and official inflation stood at 231 million percent in July last year. Late last month the country allowed Zimbabweans to do business in foreign currencies in a bid to tackle inflation.

Gono gave no updated inflation figures but said broad money supply growth rose from 81,000 percent in January to 658 billion percent in December.

The country’s opposition on Friday decided to join a unity government with President Robert Mugabe, ending a political deadlock that has worsened a political and humanitarian crisis.

Movement for Democratic Change leader Morgan Tsvangirai, who had been under heavy pressure from southern African leaders, is now set to become prime minister.

The unity government may be a step toward saving the ruined economy of a once prosperous country where over half of the people now need food aid and a cholera epidemic has killed 3,229 people and infected 62,909 others in the deadliest outbreak in Africa in 15 years.; +263 4 799112-5