Zimbabwe Currency Revised To Help Inflation
By Stewart Douglas
October 3, 2007
The central bank of Zimbabwe has today launched a variation on its existing currency, as part of its wider commitment to tackling the crippling rate of inflation that has left the country in dire economic need.
The currency will in effect reduce the number of zeros on each bank note, after the bank was forced to print $200,000 notes several months ago to cope with the rate of inflation, and it is designed to help eradicate the underground trade in currency as well as help recover the state of the Zimbabwe economy.
At the same time the interest rate for borrowing will increase to 800% in a bid to try and wrap up inflation and calm the force that has brought Zimbabwe socially and economically to its knees in recent times.
With the world’s most significant rate of inflation, Zimbabwe has been unable to afford basic supplies and raw materials for business, becoming involved in a vicious circle of printing more money to import goods from abroad.
With energy and fuel at a premium, along with the most basic of foodstuffs that have deserted supermarket shelves, the people of Zimbabwe have been suffering a tremendous decrease in living standards as a consequence of the economic problems facing the country.
Once one of the most stocked and healthy economies in the region, Zimbabwe has taken a turn for the worst, which many have attributed to extreme political policy and the dispossession of white-owned farmland.
The moves today have been criticised by analysts for refusing to address the ‘fundamental problems’ within the Zimbabwe economy, which will continue to prop up the four figure rate of inflation and ongoing currency devalution for the near future.
The Zimbabwe government have received a loan of $200 million to help buy basic provisions in order to restore the economy, although it is unknown how the government has agreed to meet its corresponding obligations for repayment.