Forex Blog: Currency Trading News & Analysis.

August 17th 2006

Zimbabwe issues new currency

With today’s post, I thought I would take a break from reporting on the major currencies and interest rate speculation, a topic which I feel has been beaten to death. A few weeks ago, Zimbabwe announced that it was issuing a new currency, in order to rein in activity in black market currency exchange. Many countries, including Zimbabwe, with ill-defined economic policies, are often severely constrained in their ability to conduct monetary policy because they don’t know how much cash is circulating. By issuing a new currency, the Zimbabwe government is effectively forcing its citizens to make known the amount of currency they possess, and may enable the country to draft a more practicable economic policy.

Central bank Governor Gideon Gono knocked three zeros off all banknotes and devalued the local dollar by 60 percent in a bid to snuff out a thriving forex black market, where the exchange rate is nearly three times the official one.

Read More: Panic as currency deadline looms in Harare

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Posted by Adam Kritzer | in Exotic Currencies, Politics & Policy | No Comments »

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© 2004 - 2018 Forex Blog.org. Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.