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Harare Looks to Mozambique For Guidance On Currency Overhaul

The Reserve Bank of Zimbabwe is considering lopping three zeros off the nominal value of the Zimbabwean dollar and eventually issuing a new currency to ease some of the calculation and accoujnting problems created by hyperinflation.

A source at the central bank, speaking on condition of anonymity, said a team of bank and Finance Ministry officials will soon travel to Mozambique to speak with their peers there about their experience in overhauling the Mozambican metical.

Lengthy strings of zeros are clogging software, hand-held calculators, cash registers and gas pump meters as Zimbabwe's annual inflation rate nears 1,200%. Businesses must routinely deal with sums in the hundreds of millions or billions, while corporate investments and national budgetary accounts are measured in the trillions.

The central bank source said legislation could be presented to Zimbabwe's parliament soon to authorize redenomination of the currency. Such operations were carried out in recent years in Argentina and Brazil in their successful battles against inflation.

But Harare economist James Jowa warned that eliminating zeros would not eliminate underlying issues that drive Zimbabwe’s inflation, like massive budget overruns.

For another view on the possible redenomination strategy, VOA reporter Blessing Zulu turned to economist Eric Bloch, who has been an advisor to the Reserve Bank.

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