Wednesday, August 02, 2006

Zero Tolerance

Robert Mugabe continues to deny economic reality:

Banks in Zimbabwe were swamped by customers yesterday after the central bank announced that three zeros were being taken off the Zimbabwe dollar to counter the 1,200 per cent inflation rate, the highest in the world.

Confusion about the effective devaluation of the currency prompted hundreds of savers to rush to deposit millions of banknotes, believing that they had to "legalise" their hoards of cash within the day. Several banks closed their doors intermittently to avoid the rush of depositors.
The Reserve Bank of Zimbabwe also devalued the

....The country's rampaging inflation has obliged Zimbab-weans to carry large blocks of currency for the most basic commodities. A loaf of bread, for instance, can cost more than a million Zimbabwe dollars - around £5.

Banks have also struggled to keep pace as their standard computer software strains to deal in 14-digit trillions and even larger quadrillions in commercial dealings. Everyone will now ignore the last three zeros on paper money.

The new official exchange rate will be 250 Zimbabwean dollars to one US dollar instead of 250,000.

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