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Interim Zimbabwe Monetary Statement Cues Devaluation Speculation


The scheduling of an "interim" monetary policy statement Thursday by Reserve Bank of Zimbabwe Governor Gideon Gono, two months ahead of schedule, has prompted speculation that after dragging his feet for months he may devalue the currency.

The business community has long been pressuring Gono to devalue the Zimbabwean dollar to stimulate exports and boost local-currency earnings from foreign sales.

The Reserve Bank has held the official exchange rate at Z$250 to the U.S. dollar even as the parallel market rate has soared over Z$20,000. The official rate was set last July when the monetary authority lopped three zeros off the currency, recalled all old bills and issued new bearer cheques - the name for the locally made scrip.

Economists warn that unless the Zimbabwean currency is devalued, exporters will continue to lose money and key sectors such as mining could collapse.

Reporter Ndimyake Mwakalyele of VOA's Studio 7 for Zimbabwe asked two experts what they expected Gono to say on Thursday: Harare economist David Mupamhadzi and Zimbabwe Economic Society President Lovemore Kadenge.

Kadenge said he did not expect a devaluation, but both economists agreed that the current official exchange rate at Z$250 is no longer tenable.

More reports from VOA's Studio 7 for Zimbabwe...

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