The Reserve Bank Govenor, Gideon Gono announced today the revaluing of the Zimbabwean dollar by dropping 12 zeros. This means the current Z$100 trillion note will be equivalent to the re-valued Z$100 note; Z$50 trillion note to the re-valued Z$50 note and the current Z$10 trillion note to the re-valued Z$10 note.
The Reserve Bank has also announced the introduction of new currency denominations of Zim-dollars $500, $100, $50, $20, $10, $5 and $1 which will start circulating with the old ones.
According to the bank, the revaluation is expected to revive the Zimbabwean economy and help address the shortage of cash the country has been experiencing.
When proposing a total 2009 Budget of Z$66.5 quintillion (US$1.9 billion), comprising $50.75 quintillion (US$1.45 billion) recurrent expenditure and $15.75 quintillion (US$0.45 billion) capital expenditure, acting Finance Minister Patrick Chinamasa on Friday called for discipline and strict adherence to budgets votes.
The minister also urged for tight measures, saying "essential for shoring up the value of the Zimbabwe dollar will be implementation of a combination of strict and painful fiscal and monetary measures that relate the Zimbabwe dollar monetary base to developments in the real sector, and avoidance of recourse to money printing beyond the economy’s production of goods and services. Realising this requires discipline and commitment to our expenditure and revenue targets and, therefore, expenditures outside the Budget will not be entertained," the minister said.
He said the 2009 Budget, together with the Reserve Bank Governor’s forthcoming Monetary Policy Statement, would be making the necessary indications and commitments in that direction.
"It must be noted, however, that implementation of the various projects and programmes under this Budget will benefit from skills retention and attraction in both the public and private sectors. The performance of our productive sectors will also require a conducive and stable macro-economic environment, which allows forward planning, regular and sustainable inflows and access to foreign currency as well as retention of skilled manpower," the minister said.
Zimbabwe is experiencing a record high inflation rate, but as Reserve bank announced the removal of Zeroes from its, it did not provide the new inflation with the last official figure put above 231 million.