Zimbabwe Central Bank Wants Gold-Backed Local Currency

The Zimbabwe economy has basically been destroyed by hyperinflation. Now the Zimbabwe central bank is considering making a currency backed by gold and diamonds. The inflation rate in Zimbabwe has fallen to 1% per month in July 2009 from an annual rate of over 200 million per cent in July 2008.

This story was reported by Nelson Banya in Reuters. According to Nelson Banya,

Zimbabwe's central bank governor Gideon Gono on Thursday proposed the introduction of a gold-backed local currency, which was destroyed by hyperinflation and replaced by multiple foreign currencies in January.

A unity government formed by rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai in a bid to end a political crisis introduced multiple foreign currencies to stop sky-rocketing inflation and revive the economy.

But Gono, a Mugabe ally whose reappointment last year has been opposed by Tsvangirai, says the shortage of foreign currencies in the country was hurting economic recovery efforts. In an article he wrote in the state-controlled Herald newspaper, Gono urged the re-introduction of the Zimbabwe dollar to ease the liquidity crunch, but said this was not a call for 'a blind return to the money printing press'.

Read the whole story here.

The Zimbabwean people have been suffering greatly under the tyrannical rule of Mugabe and the hyperinflation he brought about.

Things have improved under the new unity government but things are still very bad and have a long way to go. Read about that here. And here.