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By Torby Chimhashu

ZIMBABWE’S central bank has announced that a new currency is imminent, barely two months after announcing that the roll-out had been shelved.

The southern African country is in the grips of a severe economic crisis -- blamed on President Robert Mugabe's policies -- and battling the highest annual inflation rate in the world, at nearly 8,000 percent.

Zimbabwe lopped off three zeroes from its currency in July 2006 and phased out old notes within three weeks in a programme dubbed "Sunrise". The zeroes returned within months.

"The general public, as well as the financial sector are hereby forewarned that Sunrise Two is now imminent," Reserve Bank governor Gideon Gono said on Wednesday.

"The Reserve Bank has now put in place all the machinery, to enable the implementation of a short and precise change-over programme, which would be completed in a matter of a few days."

Gono declined to say exactly when the currency change would take place and how many zeroes would be dropped.

"The actual change-over will be done without prior notice beyond what we are saying here."

He showed journalists and bankers a new set of currency which he said would be in circulation once “the Governor pushes his button for a change-over”.

Gono said the currency reforms would be made in the second phase of Project Sunrise 2, which commences on Thursday this week.

The fresh speculation over a new currency will likely send black market traders withholding large sums of the local currency into a panic.

Since the start of the week, Zimbabweans have endured hours in long queues at banks as a cash shortage forced limits on withdrawals, with the country in the midst of an economic crisis.

Bankers blamed the shortages on a drastic cut in allocations from the central bank, but Gono denied the charge.

Banks were dispensing half the daily cash limits to customers.

Project Sunrise 2 will see the RBZ unveiling a new currency, and collecting the bearer cheques which are in circulation.

Gono said: “It has become more than evident that, left to their own whims, the blossoming cash barons, smugglers and other illicit dealers will threaten the stability of our National Payment System.

“As monetary authorities, we have closely trailed the recent trends and studied the avenues through which cash is being kept outside the formal systems, and time has come now that swift measures be taken.”

The RBZ boss said he had postponed introducing a new currency after pleas by the business community which had indicated their desire to conclude the financial year without disruption.

He added that Zimbabwe's inflation would not deter the central bank from effecting a currency change.

"Last time we removed three zeroes. But they've returned. Now we are determined not to allow them to return," Gono said.

"Some have said we are in a hyperinflationary environment and can therefore not bring in a new currency. Nothing could be further from the truth."

Gono fingered banks in the on-going crisis by saying they were colluding with cash barons and bulk currency handling corporates in illicit dealings which resulted artificial cash shortages.

“As the RBZ, we have seen the unintended consequences of the requests (by business) but now we are no longer listening. RBZ says it’s time to teach these people a lesson. Some people were beginning to sell money for between 15% and 20% margins. This is unacceptable,” Gono said.

Commencing Thursday this week, Gono said the RBZ would engage all banks to check on progress and preparedness for the change over.

The central bank has already acquired vehicles and set-up command centres for the exercise which will involve the police.

Banks and audit firms will for the forthcoming weeks, work towards changing their systems in preparation for the change-over from bearer cheques to a new currency.

Gono said he would lop off the zeroes from the new currency but refused to give away too much maintaining that “they could be 1, 2, 3 or four zeroes. Only the Governor knows how many”.

Gono said the zeroes would be gone for good contrary to what speculators had predicted, especially on the introduction of a $1 million bearer cheque.

Said Gono: “There is not going to be a 1 million-dollar bearer cheque. If we had wanted to introduce higher denominations, we could have done that long back. We have $26 trillion in 500 000 bearer cheques. But no, there is no need for that because we have all seen the samples of our new currency.

“If we could acquire a farm and build a bio-diesel plant quietly, what can stop us from achieving our goals in Sunrise 2? This is (introducing new currency) kids’ stuff we are dealing with.”

Gono said under Sunrise 2, individuals found with huge cash would be challenged to provide source of income failure of which the money would be forfeited to the Anti-Money Laundering Account.

He warned that “this time there won’t be crossing rivers at night with cash loads like what happened in 2006.”

“With immediate effect, therefore, all holders of excess cash must deposit back in the formal system in order to avoid serious and perilous losses when their hoarded loot turns into useless manure.

“The cut-off date for acceptance of current bearer cheques will be announced imminently along with the actual launch date. This time around, those who do not take heed will never recover financially, as a definite ultimate blow is being set on them,” said Gono.

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