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Central bank to delete six zeros
The Zimbabwe Times
July 01, 2008

http://www.thezimbabwetimes.com/?p=721

The Reserve Bank of Zimbabwe, is working on a solution to deal with the accumulation of zeros in monetary transactions the Zimbabwe Times gathered today.

According to Reserve Bank officials who spoke to the Zimbabwe Times on condition of anonymity the bank had engaged an accounting firm which has drafted a solution to the ever increasing number of zeros in Zimbabwe's currency.

"The issue of digits is the prerogative of the governor and about six zero's will be removed from the currency," the official said. "This means eight hundred billion will become, eight hundred thousand." Reserve Bank of Zimbabwe Governor Gideon Gono recently said he was aware of the problems created by the zeros, saying he would take remedial action soon.

Slashing of the zeros is not a novel phenomenon in Zimbabwe. Two years ago, the central bank slashed off three zeros from the currency in reform exercise. Bank's which talked to The Zimbabwe Times said they were reconfiguring their systems ahead of the announcement by the Reserve bank governor.

Businessman said they had resorted to opening multiple bank accounts for them to cope with the increased inflows of money into their accounts.

The accumulating zeros have presented challenges to businesses and individuals as prices continue to escalate. Some banks have already resorted to removing at least three or six zeros from prices in order for them to manage the excess digits.

Banks have over the past two week experienced challenges with the Real Time Gross Settlement system because it can no longer handle the growing number of zeros.

Several inter-bank transactions are failing to go through while some may take a number of days, more than the stipulated transfer period of 24 hours.

Banking officials said the current systems could process a transaction of up to $9, 99 trillion meaning any transfer above that would cause a "truncation".

Truncation occurs when the computer system fails to handle figures above its capacity. Banks were thus finding it easier to transact smaller amounts of less than $5 trillion. If a client makes a transfer of one quadrillion, the bank will have to open 150 additional accounts to facilitate that single transfer.

However, economists say banks should upgrade their internal systems to contain such transactions.

Hyperinflation is the cause of the preponderance of zeros which has bedevilled Zimbabwe's currency over the past two years or so.

The latest weekly report circulated by a leading Harare investment broker, carries the following rider: "Kindly note that we have taken out six zeros from our system for ease of transaction."

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