Zimbabwe redenominates its currency ... again

For the second time in as many years Zimbabwe is to reform its currency the Zimbabwe Dollar (ZWD) by lopping ten 'zeroes' so that from tomorrow 10 billion ZWD will become one ZWD; whether this will be of any real assistance in curbing the rampant inflation the country has experienced in the past several years is pretty doubtful in my view, unless the Government changes the way the economy operates and stops printing more money to try and finance its repressive regime, necessary because it has crushed any economically viable sector of the economy to strengthen its grip on power.

In fact this is the second currency reform Zimbabwe will have experienced in as many years! In 2006, the Government truncated three 'zeroes' off the then ZWD to create the 'New Zimbabwe Dollar', which would have had the amended ISO code ZWN, but for the fact that the Government couldn't cope with the new abbreviation so it was left as it is. So in fact 13 'zeroes' have been reomoved since the currency was first created in 1980 to replace, at par, the old Rhodesian Dollar.

Maybe there is vaulable work being done behind the scenes by the current governing 'clique' and the MDC of Morgan Tsangvirai, in accordance with the agreement signed recently; whilst quite frankly I am somewhat sceptical that this is anything other than a manoeuvre by ZANU-PF to retain hold of power indefinitely, I certainly hope I am proved to be completely wrong as without some real progress the Zimbabwean people will only be back in the same situation a couple of years down the road. The new currency may make accounting transactions easier and at least temporarily reduce they sheer quantity of notes they must carry around to buy the basics of life, but lopping 'zeroes' off a currency does not, of itself, change anything fundamental in an economy.