Constitutionality of removing zeros from Zimdollar questioned

By Lance Guma

31 July 2006

The Reserve Bank has slashed three zeros from all banknotes in the country as Mugabe’s regime grapples to contain the effects of a 1,200 percent inflation rate on the economy. Governor Gideon Gono announced that the new measures were meant to help consumers deal with the high number of zero’s in their transactions. Tendai Biti a Harare based lawyer who is also the MDC Secretary for Economic Affairs questioned the constitutionality of removing zeros from the currency. He says this was equivalent to stealing value and the regime had to address the economic problems and not its symptoms. He says they are still investigating the legalities involved before deciding on what course of action to take.

In a televised monetary policy review the central bank governor also effectively announced a devaluation of the Zimdollar on the interbank exchange rate to Z$250 for every US dollar. Analysts calculate the devaluation at 60 percent although the parallel market remains 4 times higher. Zimbabweans now have 3 weeks to exchange their existing bank notes for new ones that will be issued starting Tuesday. Economists have been quick to point out that the slashing of zero’s does not amount to a revaluation of the currency but an attempt to reduce the amount of money people carry around for their shopping. Bearer cheques in operation for several years are set to scrapped.

A year after government directed the demolition of vending stalls and homes of poor people in the urban areas under Operation Murambatsvina, Gono announced ‘Project Sunrise’ meant to focus on the development of Small and Medium Scale Enterprises. Biti poured scorn on the hypocrisy behind the move and compared Gono and his colleagues to cartoon characters Tom and Jerry saying they were not serious. He says Gono has made a lot of promises and none of them have been delivered.

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