Zimbabwe To Slash Value Of Currency

Zimbabwean President Robert Mugabe attends an address by the Governor of the Reserve Bank in Harare, July 30, 2008.
AP Photo
Zimbabwe will knock 10 zeros off the country's hyper-inflated currency next month, making 10 billion dollars one dollar, the nation's central bank governor said Wednesday.

President Robert Mugabe immediately warned in a televised address that he will impose a state of emergency if profiteers take advantage of the change on Aug. 1.

"Don't drive us further. If you drive us even more we will impose emergency measures. We don't want to place our country under emergency rule," Mugabe said.

Zimbabwe suffers the highest inflation rate in the world. Inflation is constraining operations of the country's computer systems, central bank Gov. Gideon Gono said.

Computers, electronic calculators and automated teller machines at banks have not been able to handle basic transactions in billions and trillions of dollars.

Just last week Gono introduced a new 100 billion-dollar note that is not enough to buy a loaf of bread.

Gono said on Aug. 1 the bank will issue a new 500-dollar bill equivalent to 5 trillion dollars at the current rate.

Meanwhile, Mugabe said Wednesday that negotiations with the opposition on a power-sharing government were continuing.

He said in a televised address that "we want to succeed." But he warned that "sometimes compromise is difficult."

South African mediators have said the two sides adjourned for a few days but others say they are deadlocked over who would lead a new Zimbabwean government. Both Mugabe and opposition leader Morgan Tsvangirai insist on being head of government.

Mugabe and Tsvangirai agreed to the talks to end months of political violence that has left more than 150 people dead.