Zimbabwe's ‘sunrise' – or yet another ‘sunset'?

Central Bank Governor Gideon Gono announced the move yesterday, dubbing it Sunrise 2…

Shortages of cash in the struggling southern African nation worsened this week, obliging customers to crowd into banking halls in a desperate bid to get money as they prepare for the Christmas period.

"A practical solution is on its way. Very soon and before the festive season," Gono told the official Herald newspaper in an interview.

"There will definitely be a Sunrise 2 (new currency) coming anytime from now, mainly to deal with the cash shortages, as well as administering a decisive deterrent blow on speculators."

Zimbabwe is in the grip of a chronic economic crisis, marked by the world's highest inflation rate, surging unemployment and shortages of foreign currency, fuel and food.

Gono, who last month said a new currency was imminent, accused some bankers and shops of working with illegal foreign currency dealers to siphon cash out of the formal banking system.

He said out of the ZW$58 trillion in circulation as of November 15, only ZW$1 trillion was accounted for by banks, meaning that the rest was "floating somewhere out there".

Analysts say a foreign currency crunch has propelled a thriving black market where the Zimbabwe dollar trades 50 times weaker than the official bank rate of Z$30,000 to the US dollar.

The change in notes follows a similar move last year, when the central bank lopped off three zeroes from its currency and phased out old notes within three weeks in a program dubbed "Sunrise".

Article courtesy of New Zimbabwe