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Zimbabwe cbank to issue early statement amid crisis

Wed 25 Apr 2007, 7:37 GMT
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By Nelson Banya

HARARE, April 25 (Reuters) - Zimbabwe's central bank governor will make an interim policy statement on Thursday, two months ahead of schedule, in an attempt to deal with a worsening economic crisis, state media said on Wednesday.

The central bank, which has failed to stem soaring inflation in the economically strapped southern African nation, traditionally makes policy statements in January and July.

"Reserve Bank of Zimbabwe Governor Gideon Gono will tomorrow present an interim monetary policy statement largely expected to give impetus to an economy that has continued to face mounting challenges," the state-owned Herald newspaper reported.

Gono is expected to make the policy statement in Bulawayo, Zimbabwe's second largest city, during an annual trade fair, the newspaper said.

The announcement comes at a time when the government faces growing calls to devalue the local currency, which has been pegged at 250 Zimbabwean dollars to the U.S. dollar since Aug. 2006 but trades at a rate 100 times weaker on the black market.

The nation's economic crisis, widely blamed on President Robert Mugabe's policies, has prompted a series of strikes and political protests since the beginning of the year.

The government has responded with a violent crackdown on political opponents.

Zimbabwe's government statistics agency earlier this month postponed indefinitely the release of inflation figures for March. Analysts expected the data to show inflation rising to above 2,000 percent from 1,729.9 percent in February.

In January, Gono deferred major monetary policy decisions despite expectations of a shift on the exchange rate. He proposed instead a wage and price freeze as well as the removal of government subsidies as a way of tackling rampant inflation.

Mugabe's government on Tuesday ended a stand-off with farmers who had delayed the start of the tobacco selling season after complaining that a skewed exchange rate made it unprofitable to grow the crop.

Mining firms also have protested that the fixed exchange rate has devastated their businesses.

Zimbabwe, once the prosperous breadbasket of southern Africa, now faces rising poverty, unemployment of about 80 percent and chronic shortages of fuel, food and foreign exchange.

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