HARARE – Zimbabwe banking and industry chiefs have appealed to central bank
governor Gideon Gono to slash zeroes from the country’s currency when he
announces his half-year monetary policy statement on Wednesday.
Gono had been expected to announce the statement on Tuesday. He shifted the
announcement to today after last-minute consultations on Monday with the
Bankers Association of Zimbabwe (BAZ) and the Confederation of Zimbabwe
Industries (CZI) who pleaded for the removal of zeroes from the currency to
allow a smooth payment system.
Sources said the business leaders asked Gono to remove nine zeroes from the
local currency, which would mean a 100 billion dollar note – Zimbabwe’s
highest note – would become $100.
The bankers and industry argued that the country’s payment system could not
handle figures above a $1 trillion, hence the need to slash the zeroes.
“The monetary policy statement is now on Wednesday,” said a source, who is
an executive with a Harare bank. “Gono had to factor in the appeal made by
bankers and industry. He met them on Monday and agreed to move the date to
Wednesday after considering their input.”
The banking executive, who did not want to be named for professional
reasons, said bankers told Gono that their software could only handle
figures below $999 billion. They said some company accounts were now above
$1 quintillion (a figure with 18 zeroes) and existing software could not
read such figures making difficult to transact.
Our source was, however, not sure on the number of zeroes Gono – who is
understood to have wanted to remove only six zeroes from the currency while
also introducing a new $500 billion note – would eventually decide to slash.
Gono, appointed Reserve Bank of Zimbabwe governor in 2003, is said to have
told bankers and captains of industry that he wanted to consult “his
principals” on their request for more zeroes to be removed off the currency.
Kumbirai Nhongo, Gono’s spokesperson at the central bank, confirmed
yesterday that the monetary policy statement would be issued Wednesday.
However, he would not be drawn to disclose further details.
“The statement will be announced on Wednesday at 9 am at the Harare Rainbow
Towers,” he said. “The governor had last minute consultations with
stakeholders on a number of issues, which I am not at liberty to disclose.”
BAZ president John Mangudya yesterday declined to comment on the matter,
while a CZI spokesperson confirmed that the industry’s president Callisto
Jokonya met Gono on Monday but was not at liberty to give details.
Gono reports and gets instructions from President Robert Mugabe and his
relationship with the 84-year-old leader has seen him usurping the powers of
the ministry of finance.
The central bank boss is accused in government of financing quasi operations
resulting in galloping inflation officially said to be over 2.2 million
percent, but estimated by independent analysts to be anything above 9
million percent.
His long-awaited monetary policy statement is expected to outline how he
intends to curb run-away inflation and the shortage of cash in the country.
However, most analysts have warned that today’s policy statement would be
bereft of “sound economic solutions” owing to the central bank’s
quasi-fiscal engagements and continued money supply growth, which they said,
was inflationary. – ZimOnline