January 23, 2009

Bank: Zimbabwean currency nearly worthless

Zimbabwe's central bank said the country should adopt the South African rand to use in conjunction with the near-valueless Zimbabwe dollar, reports said.

Reports of the bank's admission that the Zimbabwean dollar has collapsed come from those who have seen a 105-page recovery plan believed to be the work of Reserve Bank Gov. Gideon Gono, SW Radio reported Friday.

Movement for Democratic Change Shadow Secretary for Finance and Economics Tapiwa Mashakada said the move would create a consumer-driven economy that relied on imports, driving unemployment -- already at 85 percent -- even higher.

With the price of staples doubling every 24 hours, many stores already do not accept Zimbabwe's currency, the report said.

Steve Hanke from the CATO Institute pegged the annual inflation rate at 6.5 quindecillion novemdecillion percent "“ meaning 65 followed by 107 zeros, the report said.

President Robert Mugabe is under pressure to pay government employees in foreign currency, the report said. Some agencies that do business with the government, such as the Zimbabwe National Water Authority, are demanding payment in foreign currencies, the report said.