Currency devaluation may be stopped

Leonard Tsumba, director of Zimbabwe’s central bank has said that President Robert Mugabe may intervene to stop plans by commercial banks to devalue the national currency in early May.

News reports in Zimbabwe said devaluation of the currency would accelerate inflation which is currently running at 50 percent. The country’s commercial banks said earlier that they planned to end the “gentleman’s agreement” with Zimbabwe’s Reserve Bank, which pegged the currency at 38 Zimbabwean dollars to the American dollar.

The managing director of the Tobacco Sales Floor, Pat Devenish, told the domestic Ziana news agency that the tobacco industry, Zimbabwe’s main source of foreign currency, could collapse unless the Zimbabwe dollar was devalued.