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Zimbabwe Central Bank Tries To Revive Industry By Injecting Funds

Reserve Bank of Zimbabwe Governor Gideon Gono is printing trillions of local dollars and pumping them into the country's profoundly troubled manufacturing sector in an effort to revive the supply side of the economy, business sources said.

Gono has said he intends to reverse the damage done by the government since June when it imposed deep price cuts across every economic sector, resulting in cleared-off store shelves, severe shortages of essential goods, and many company closures.

Defending his latest economic initiative, Gono told the state-controlled Sunday Mail newspaper that for Zimbabweans, "the current battle is ensuring survival through the ability to get basic goods and services at affordable and yet viable prices."

But economists and business leaders said Gono’s so-called Basic Commodity Supply Intervention Facility will mainly bring additional fuel to hyperinflation.

The RBZ is providing low-interest funding to companies in targeted sectors in hopes of stimulating the production of essential goods. Gono hopes that once manufacturers resume production, the increased availability of goods will bring down inflation.

Consumers have yet to see benefits from the scheme. Millers are demanding a 177% increase in the price of maize meal, a national staple, while transport operators in the capital and other major cities boosted their fares by 50% on Tuesday.

President Marah Hativagone of the Zimbabwe National Chamber of Commerce told reporter Blessing Zulu of VOA’s Studio 7 for Zimbabwe that some of her organization’s members have benefited from the RBZ's distribution of low-cost funding.

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