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Zimbabwe Currency Redenomination Looms, Two Years After Last One

Zimbabwean bankers, businesses, economists and consumers Monday awaited further details from the central bank on how it will address cash shortages, following a statement by its chief to state media that he will remove "more zeros" from bank notes to simplify transactions.

Such a redenomination of bank notes would be a repeat of an operation the central bank carried out in August 2006, causing massive economic disruption as obsolescent notes were called in by the central bank, their holders obliged to explain how they came by them.

The anticipated central bank move follows lobbying by businesses whose cash registers, calculators, and other devices are now unable to handle long strings of zeros - as many as 21 as transactions mount into the trillions, quadrillions, quintillions and even sextillions.

The most likely move would be to remove nine zeros from the currency, such that a Z$10 billion note would become a Z$10 note.

Sources in Zimbabwe said Monday that the battered Zimbabwean dollar was trading between Z$500 billion and Z$800 billion to the U.S. dollar. But some parallel market were quoting U.S. dollar exchange rates in the trillions, perhaps reflecting a rush by participants holding large amounts of Zimbabwean dollars to dump them in advance of central bank controls.

The state-run Sunday Mail said on the weekend that the central bank is also planning to raise its limit on cash withdrawals from banks to relieve tackle cash shortages. Currently, individual account holders can only withdraw Z$100 billion a day from their bank - barely enough to cover the cost of commuting to and from work in a common conveyance.

Economist and businessman Luxon Zembe, a former president of the National Chamber of Commerce, told reporter Patience Rusere of VOA's Studio 7 for Zimbabwe that had become almost impossible for businesses to deal with so many zeros, adding the caveat that aside from simplifying transactions, redenomination would hold few economic benefits.

More reports from VOA's Studio 7 for Zimbabwe