Zimbabwe's central bank dangles sweetner for investors

Zimbabwe's central bank dangles sweetner for investors

GONO

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By Agencies

ZIMBABWE'S central bank announced Tuesday a new measure to attract much-needed foreign investment: a guarantee to pay back the entire capital within three months if investors decided to leave.

"We have opened this limited window to new foreign direct investors to come in with their investments," Central Bank Governor Gideon Gono said during his mid-term review of monetary policy.

"From September 1, 2004 up to December 2006, there will be this window which will allow them the privilege to ... leave the country in the soonest possible (time) if they find the conditions of operation are not as they expected."

"We will be able to pay the principal... the capital within 90 days of your telling us that you want to exit. We believe this is possible and we are putting in place measures to ensure that this redemption fund is operational," Gono said.

Gono's mid-term review came after his maiden monetary policy statement in December last year when he announced measures to combat record-high inflation in a country rocked by a social, political and economic crisis.

Zimbabwe's annual inflation rate is among the highest in the world.

It peaked at more than 600% at the end of 2003 but has since declined to around 395% in June this year.

Gono said the bank was on track to achieve its target of 200% inflation rate by the end of the year, and announced that the timeframe for his economic turn-around plan would be brought forward from end 2008 to 2007.
AFP
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