Zim's central bank urged to knock 12 zeros off Zim dollar

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Article by: Sapa

Published: 28 Jan 2009

Zim's central bank urged to knock 12 zeros off Zim dollar

The Confederation of Zimbabwe Industries (CZI) has urged the Reserve Bank of Zimbabwe to knock 12 zeros from the Zimbabwean dollar, the state-controlled Herald reported on Wednesday.

It also called for a freeze on the monetary base (money printing) at current levels as a strategy to stabilise the local unit, the newspaper said.

"The industrial representative body proposed that authorities allow multiple currencies to be used, stressing the local unit should remain a legal and not compulsory tender."

CZI held the view that freezing the local currency monetary base would quickly stabilise the local currency. After a period of free trade and subsequent stabilisation, a fixed rate could be declared.

CZI said the removal of zeros was vital for processing transactions.

According to the Herald, the central bank removed 10 zeros in
August, but hyperinflation and speculative activities had rendered the strategy "less effective."

"Presently, figures running to quintillions -- 18 zeros -- are being transacted.

"The removal of 12 zeros would see a return to millions becoming the highest range of figures once again," the Herald reported.

On Thursday, Acting Finance Minister Patrick Chinamasa was expected to present the 2009 National Budget statement. The monetary policy statement would be announced "anytime soon".