Zimbabwe central bank to limit money printing to curb inflation, calls for fiscal restraint

HARARE, Jan 31, 2007 (AFP) – Zimbabwe’s Reserve Bank governor Gideon Gono on Wednesday unveiled a battery of belt-tightening measures including slashed money supply to put the brakes on four-digit inflation. Gono however did not devalue the local currency, saying it was no panacea.

“The urgency of the need to reduce inflation impels that 2007 be the year for unprecedented fiscal and monetary policy restraint,” Gono said a monetary policy statement.

“To this end, the Reserve Bank will reduce broad money supply growth from the current levels of over 1,000 percent to between 415 and 500 percent by December 2007 and subsequently to under 65 percent by December 2008.”

Gono bemoaned tensions between political rivals in the economically-ravaged nation and urged Zimbabweans to join hands to fight inflation, which stood at 1,281 perecent in December.

He warned that if no bold correctives were taken “the inflation dragon will swallow our economy.”

“We currently observe latent political tensions in as much as there are economic and social tensions arising from the economic hardships the people are experiencing across the board,” Gono said.

“Such disunity and distrust between us does not a